Money Laundering & 75 Million Suspects

Money Laundering & 75 million
M S Siddiqui
Money Laundering & 75 Million Suspects
Definition
Everybody needs money for livelihood and also luxury in life. They earn through legal or
irregular or criminal means and they involved in some acts to generate money for them
which are of criminal act in nature. Money laundering is the processing of these criminals to
disguise their illegal money so that they can enjoy these without jeopardizing their source.
Money laundering is disguising or transferring of criminally derived money for the

purpose of concealing the true source of income, ownership, or use of the fund. This is the
action of transferring to some where within country or abroad, converting or transforming or
using for consumption to make this money legal or valid in the eye of Law or alternately
hiding somewhere. Organized crime groups are Narcotics traffickers, perpetrators of
financial fraud and others illicit earners invest considerable effort into laundering their
money, so that they can eventually can use the money and re-invest for further income.
The money laundering also commit through conceal, retain, transfer, remit or invest in
moveable or immovable property also to hide these money, even when it is earned through
legitimate means.
In US law, money laundering is the practice of engaging in financial transactions to

conceal the identity, source, or destination of illegally gained money. The common law of
UK defined as, taking any action with property of any form which is either wholly or in
partly the proceeds of a crime that will disguise the fact that that property is the proceeds of
a crime or obscure the beneficial ownership of said property.
In the recent past, the word ‘money laundering’ was applied only to financial transactions
related to organized crime. It is now expanded by government and international regulators,
such as the US Office of the Comptroller of the Currency to mean “any financial transaction
which generates an asset or a value as the result of an illegal act, which may involve actions
such as tax evasion or false accounting”. In the UK, it does not even need to involve money,
but any economic good. Money laundering may committed by private individuals, drug
dealers, businesses, corrupt officials, members of criminal organizations such as the Mafia,
and even states.
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A definition of what constitutes the offence of money laundering under Bangladesh law is
set out in Section 2 (Tha) of the Prevention of Money Laundering Act 2009 (Act No. 8 of
2009) which is reads as follows (translated by this writer):
“Money Laundering means –
(a) Money or Property earned or acquired directly or indirectly through predicate offence
being transfer in side or outside of Bangladesh or conversion for hiding the source.
(b) Any sorts of such transaction or attempt of transaction which may not needed to be
reported (by listed financial institutions entrusted by MLPA).
(c) Any other acts to perform above said acts of money or property for concealment or
attempt to conceal knowingly and planning thereof.
The Properties has been defined in section 2 (j) of the Act as “Properties means movable
or immovable properties of any nature and description, visible or invisible. Cash money,
electronic or digital or any other instruments or documents of ownership of these said
properties.”
The U.S. Customs Service, an arm of the Department of the Treasury, provides a
definition of money laundering as "the process whereby proceeds, reasonably believed to
have been derived from criminal activity, are transported, transferred, transformed,
converted or intermingled with legitimate funds for the purpose of concealing or disguising
the true nature, source, disposition, movement or ownership of those proceeds. The goal of
the money-laundering process is to make funds derived from, or associated with, illicit
activity appear legitimate."
Another definition of Money Laundering under U.S Law is, “… the involvement in any
one transaction or series of transactions that assists a criminal in keeping, concealing or
disposing of proceeds derived from illegal activities.”
The EU defines it as "the conversion or transfer of property, knowing that such property
is derived from serious crime, for the purpose of concealing or disguising the illicit origin of
the property or of assisting any person who is involved in committing such an offence or
offences to evade the legal consequences of his action, and the concealment or disguise of
the true nature, source, location, disposition, movement, rights with respect to, or ownership
of property, knowing that such property is derived from serious crime."
Interpol General Secretariat Assembly in 1995, which defines money laundering as: "Any
act or attempted act to conceal or disguise the identity of illegally obtained proceeds so that
they appear to have originated from legitimate sources".
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The Joint Money Laundering Sterling Group (JMLSG) of the U.K. defines it as "the
process whereby criminals attempt to hide and disguise the true origin and ownership of the
proceeds of their criminal activities, thereby avoiding prosecutions, conviction and
confiscation of their criminal funds". In lay terms Money Laundering is most often described
as the “turning of dirty or black money into clean or white money”. If undertaken
successfully, money laundering allows criminals to legitimize "dirty" money by mingling it
with "clean" money, ultimately providing a legitimate cover for the source of their income.
Generally, the act of conversion and concealment is considered crucial to the laundering
process.
In other words the money whitening opportunity in our Finance Acts of Bangladesh from
time to time is the official money laundering by persons or criminals. The government
withheld Money laundering act or immunized the black money owners (truly criminals)
under Money Laundering Prevention Act 2009. It has become more prominent in political,
economic, and legal debate. The process make the illegal acts of generating money almost
always are themselves criminal in nature but whitening in a “legal way” to put into the legal
economy.
The MLPA 2009, defines ‘money laundering’ in an extensive way that includes direct or
indirect acquisition of property by illegal means and transfer, conversion, or concealment of
any property in an illegal manner. Under this Act, money laundering is established as a
criminal offence.
In Bangladesh penal Code the act of aiding any person in illegal transfer, conversion or
concealment of any property amounts to ‘money laundering’ and as such is punishable in
accordance with the MLPA, 2009. Moreover, the Penal Code, 1860 criminalizes dishonest or
fraudulent removal or concealment of property, dishonestly receiving or retaining stolen
property and assisting in concealment of stolen property. It is relevant here to mention that,
under the Penal Code 1860, ‘stolen property’ includes, inter alia, the property in respect of
which dishonest misappropriation or criminal breach of trust has been committed.
It is interesting in that a thief who steals a garment from a shop commits offence under
CrPc, as well as under MLPA because he has possession of an asset derived from crime. The
MLPA can be applied in some act or crime under CrPc.
History of laundered money
Money laundering is quite an old phenomenon, which is commonly known as hundi in

our country for transferring money from one country to another country other than legal
transfer. This hundi is very common process of transferring money by expatriates specially
the less educated expatriates for sending money from abroad. Hundi is also popular among
the people to transfer illegal and even illegal money abroad for keeping the money in safe
distance, purchase of properties, education of children, treatment, payment for international
trade and also other purposes. In this period of globalization. the citizen send money abroad
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for many reasons but the foreign currency transactions are very restricted, hence necessity
follow no law or rule. Hundi is a offence under foreign Exchange Control act 1947 and
MLPA 2009 but hundi is so widely used process of transaction that many citizen don’t even
know that it is an offence. The process of transferring money in and out of the country
through official channels is very restricted or limited, that is it does not serve the purpose of
the citizens. In reality hundi is part of inseparable personal and commercial transaction
process. Bangladesh authority became concerned of hundi only after advice from United
Nation and western countries particularly to prevent terrorists and drug trafficking etc. There
is a thin line between necessity of these transactions and illegal transactions in Bangladesh
due to strict foreign currency regulation. Bangladesh has urgent need to change the Foreign
Exchange Regulation Act, 1947.
It is said that Jews were in financial transaction of laundering money and some European
countries before 2nd world war were suffered persecution in Austria, Czechoslovakia,
France, Germany, Hungary, Italy and Poland not for religion but for bad business practices.
They use to deposit their money in Switzerland. At that time, Switzerland was not
resourceful country. They offered to maintain numbered accounts, walking Account,
Fictitious Account, Shell account (i.e. for those companies that primarily exist only as named
legal entities without any trading or business activities) etc and get benefit of these
transaction. Their goodwill was their strict confidentiality about clients. Swiss banks extend
the facility later on to shady characters all over the world. This may be early history of
money laundering.
After Second World War, US found that they were confronting with a growing list of
commercial, fiscal, and environmental offences that did not actually cause direct harm to any
one identifiable victim. They were perused softer law to punish these criminals and
discourage similar crimes in the future. It was necessary to confiscate the money and prevent
to laundering and reuse in other organized crimes.
The Guardian newspaper in Britain used the term laundering, referring to the process of
moving the dirty or illegal contributions fund of US President Richard Nixon’s re-election to
Mexico, then brought the money back through a company in Miami termed for the first time
as "laundering.". It was famous as Watergate scandal in early 80s. Later on the United
Nations Convention of 1988 on illicit traffic in narcotic drugs and psychotropic substances
termed the money laundering as a process of conversion of illicit cash to a less suspicious
form, so that the true source of ownership is concealed and a legitimate source is created.
Money laundering refers to illegal transfer of fund from one place / country to another,
where not only the non-banking system, but also the recognized banking institutions are
involved in the process.
Money laundering came into world’s focus for the first time when the government of the
United States of America declared money laundering as a criminal offence and took some
anti-money laundering measures duly enacting laws in 1986. The U.S. government has
issued stern warning to all the banks functioning in the States, to take drastic actions for
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money laundering, after the terrorist attack on September 11, 2001. The worldwide survey
conducted by the Financial Action Task Force (FATF) in 1996-97 on money laundering
measures noted that, along with drug trafficking, financial crimes were the most frequent
mentioned way of money laundering.
Bangladesh was persuaded to enact such law after The United Nations Convention of
1988 on illicit traffic in narcotic drugs and psychotropic substances. The Money Laundering
Prevention Act-2002 came into force on April 5, 2002 (here after emended to present Act in
2009) with the aim to prevent money laundering and also of ensuring that, the drug
traffickers and criminals do not keep and enjoy the benefit of their crimes. According to this
Act, money laundering means-earning or receiving properties through direct or indirect
illegal activities, receiving properties legally or illegally, which may be transferred,
transformed hidden in a place or helping to do so illegally. According to this Act, property
means tangible or intangible assets of any nature and design. In line with the decision of UN
Convention Bangladesh also passed an Any Terrorist Act 2009.
Money laundering legislation in the UK is governed by three Acts of primary legislation:

The Terrorism Act 2000, The Anti-Terrorist Crime & Security Act 2001, The Proceeds of
Crime Act 2002 and the Money Laundering Regulations 2003 and 2007 as well as
Professional guidance provided by industry groups including the Joint Money Laundering
Steering Group and the Law Society but approved by the UK Treasury.
Money laundering process
There is no single method of laundering money. Methods can range from the purchase
and resale of a luxury item e.g. a house, car or jewellery. This is more comfortable in
Bangladesh as sell and purchase properties and payment of tax calculated on the basis of
government fixed value but not at transacted value. There are some 'shell' companies in
documents without any business transactions or production and also some ever losing
business in Bangladesh are maintain by black money holders for whitening whiten their
black money by way of shown profit. That’s why many members of other profession enter
into business after thrown out of their profession and/or enter into business through
companies formed under ownership of their near and dears. In most of the cases the
criminals enter in to “Business” after retirement from own normal or premature profession.
Many members of illegal profession usually enter any business to hide or cover up actual
illicit profession. The society some time confused of link between business and crimes due
to presence of criminals or ex-criminals in business. There are a number of crimes where the
initial proceeds usually take the form of cash that needs to enter the financial system by
some means. Bribery, extortion, robbery and transaction of drugs are always need safe rout
to enter the valid financial system. so that it can be converted into a form which can be more
easily transformed, concealed or transported. The methods of achieving this are limited only
by the ingenuity of the launderer and these methods have become increasingly sophisticated.
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There are some phases of money laundering as Placement, layering, and integration.
Beginning with the placement of illicit proceeds and mostly putting currency in any financial
institution means placement and the creation of complex networks of transactions which
attempt to obscure the link between the initial entry point, and the end of the laundering
cycle with the movement of funds from institution to institution to hide the source and
ownership of the funds is layering, and concluding with the reinvestment of those funds in
an ostensibly legitimate business or return of funds to the legitimate economy for later
extraction in any investment is integration.
There are some more acts to conceal the identity of it and absorb in the economy or with
properties so that it seems earned some other legitimate manner to the process make the
money legitimate in any way.
This money may be hide in process of invest in commercial concerns which may
knowingly or not knowingly be part of the laundering scheme, and it is these which
ultimately prove to be the interface between the criminal and the financial sector. The money
launderer may use to transfer, sale and purchase of assets, and changes the shape and size of
the lump of money so as to obfuscate the trail between money and crime or money and
criminal is called movement. The criminal invest or spends the money in assets mostly
landed properties, or invest for comfortable lifestyle. This is more likely the first choice of
money launders in Bangladesh to buy land property due to lack of social security and
scarcity of land.
The stock market is safe heaven for black money and there the process of trading and
accounts for system is not enough to bring all the invested money in to records. Our
Government also prefer the black money to come to stock market by way of easy whitening
process with out any accountability what so ever.
Sources Black money
Bangladesh is a safe heaven of laundered money. Drug trafficking, illegal arms

smuggling (say under investigation case of famous 10 trucks of arms), interference in
Government purchase, influencing in development program and government licensing
process are probably largest source of illegal proceeds. In our country, non-drug related
crime is increasing significantly. Organized crime, tax evasion, and fraud in its many
varieties like trade fraud, bank and other financial fraud, insurance, and other fraud entail
significant laundering of funds. It remains difficult to assess the scale of the money
laundering problem and most probably 52% of GDP are black and laundered in Bangladesh.
Many regulatory and governmental authorities estimate each year the amount of money
laundered, either worldwide or within any particular economy. A frequently cited figure is 2-
5% of the worldwide global economy, stated by the IMF. But some academics note that such
figures are usually simply best guesses as there is no yard stick or official documents of this
unofficial money. There is a dearth of data on the actual amounts of money laundered
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worldwide. Some academic commentators have expressed real concerns about the reliability
and basis of figures used by governmental and multinational organizations. It is always hard
to find out real figures of such illegal acts.
The black money holders don’t keep all the amount in the country. They transfer cash and
assets in more than one country. The amount of capital flight has been done so far from
Bangladesh by way of money laundering is not estimated exactly. Around Tk 342.15 billion
was laundered in the fiscal year 2002-03 as has been estimated by the General Secretary of
Bangladesh Economic Association (BEA). Presenting the estimate at a seminar, he said,
smuggling topped the list with 52.6 percent of the total transactions in the monetary
underworld in Bangladesh. The seminar on “Money Laundering: Bangladesh Perspective”
was organized in Dhaka by Bangladesh Young Economist Association. It was also revealed
in the seminar that, foreign remittances worth around Tk 72.00 billion, remitted by the
expatriate Bangladeshis, were transferred through money laundering during the said fiscal.
The amount is 21 per cent of the total amount laundered in the fiscal year 2002-2003. The
amount spent for treatment abroad and transferred though money laundering stood at Tk 9.6
billion, some 80 percent of the total Tk 12 billion spent for the purpose. As per the IMF
estimate Tk 54.64 billion in 2001-2002 and Tk 60.10 billion in 2002-2003 fiscal year were
laundered from Bangladesh.
Our country could earn foreign currency four times higher than the present earnings if all
the remittances are sent though official channel. It was also revealed in the statement that
about five million expatriate Bangladeshis send 80 per cent of their remittance though
unofficial and illegal channels like money laundering, depriving the country of big chunk of
valuable foreign currencies. Remittance of the hard-earned income to home by the
Bangladesh workers abroad has been the most trouble-free foreign earning for Bangladesh
for quite sometime. This earning can be raised substantially if money laundering is curbed.
Because of easy mechanism and quick payment facilities, large numbers of expatriate
Bangladesh nationals prefer to utilize the informal channel for transferring their earning back
home instead of banking channels. In these cases secrecy of payment made to beneficiary is
also maintained very strictly, which is not done by the paying banks. Most of the Bangladesh
workers in the Middle East countries are illiterate. As the informal channel of money transfer
does not require any banking norms, they prefer informal channel for money transfer. The
expatriate Bangladesh nationals also choose the informal channel for money transfer,
because of the higher service charge of foreign banks and lower conversion rate. A simple
survey will revealed that the investment of expatiate in built of house and purchase of lands
are not subject to accounts for since did not sent through remitting companies means those
are laundered money.
Statistics of laundered money
There were over 200 million drug users in the world and in 1995 the world’s illegal
narcotics trade was calculated at $400 billion. This total is equivalent to 8 per cent of the
world’s trade, which is more than transaction of motor vehicles, iron and steel and about the
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same as the gas and oil industry. In 1999 a US Congressional hearing was told that up to $48
billion per year in profits were generated by illegal drug sales, which was laundered.
The Fortune Magazine revealed in February 2000 that General Motors, the highest selling
motor company had turnover of $161,315,000,000 and money laundering per in this year is
ten times the annual turnover of General Motors.
The global laundered amount as per IMF estimates that US$ 1.5 to 3 Trillion, it may be
even high. A part of this money keeps moving back and forth disguised as remittances
between countries while its owners keep collecting a premium over official exchange rates
also make the money white and legalize the ownership.
At an individual country level, in 2000, illegal narcotics sales in the United States were
estimated by the White House Office of National Drug Control Policy (ONDCP) Drug
Policy Information clearinghouse as being: $36 billion spent on cocaine, $11 billion on
marijuana, $10 billion on heroin, and $5.4 billion on methamphetamine and $2.4 billion on
other illegal substances. In total, the overall spend in 2000 reached $160.7 billion – with
Americans consuming approximately 260 metric tons of cocaine and 13.3 metric tons of
heroins.
The estimated GDP of the United States in 1998 was $8.511 trillion - thus the annual
money laundering figure is 17% of this. Or to put it another way the GDP of the United
States is only just five times that of Global Organized Crime. In fact the figure of $1.5
trillion is only dwarfed by three individual country’s economies.
The use of illegal substances has some strange but telling after effects. Research has
shown that 90 per cent of banknotes in circulation in the United States are contaminated by
narcotics; a similar analysis in London in 1999 showed that 99 per cent of all banknotes
circulating in the city are tainted with cocaine, with 1 in 20 exhibiting high levels of the
drug, suggesting that they have been handled by dealers or have been used to snort the drug.
The NCIS (national criminal investigation services), United Kingdom about ‘Threat
Assessment of Serious and Organized Crime’ in 2003 stated that the overall size of criminal
proceeds in the country and the amount that is laundered is unknown. However, customs
authorities had estimated that the annual proceeds from crime in the UK were anywhere
between £19 billion and £48 billion – with £25 billion being a realistic figure for the amount
that is laundered each year.
The Republic of Ireland with its growing financial centre of Dublin estimates that in
1998, $126 million was suspected of being laundered through the country. Informal
estimates voiced in 1997 were that yearly money laundering activity in Italy totaled over $50
billion.
Also in 1998 the Swiss Finance Ministry confirmed that the country was implicated in
$500 billion of money laundering each year. Although no official figure exists it has been
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reliably estimated that between $40 to $50 billion of Russian Money resides in Swiss Banks
- with realistically little way of knowing whether it is flight capital or laundered money
The GDP of Switzerland is $191,000,000,000 - just an eighth of the annual money

laundering figure.
The black market peso exchange system in Colombia is estimated to launder $6 billion
per annum in drug profits. It has been estimated that each year $15 billion flows out of
Russia and it is almost impossible to determine how much of this figure is capital flight and
how much is money laundering. Government figures in the mid 1990’s calculated that 25 per
cent of the country’s gross national income was derived from organized criminal activities.
Mexican drug cartels (now more powerful than their contemporaries in Colombia ) are
conservatively estimated to generate profits of more than $9 billion per year, that is
approximately 5% of Mexico ’s GDP. The Canadian Solicitor General commented in 1998
that the illicit funds generated and laundered in Canada each year was between $5 and $17
billion.
A 1996 report published by Chulalongkom University in Bangkok estimated that a figure

equal to 15% of the country’s GDP ($28.5 billion) was laundered criminal money. In
Indonesia, which has a rapidly escalating money laundering problem, one US law
enforcement agency states that $500,000 is washed on a weekly basis by West Africans and
Southeast Asians using West African Couriers.
The United Nations Human Development Report of 1999 commented that organized
crime syndicates grossed $1.5 trillion per annum, which is more than many developed
economies and multinational corporations. Recent figures from the International Monetary
Fund suggest that the amount is now nearer $2 trillion.
In Bangladesh the statistics have no reliability but it is estimated that 75% of transactions
are in cash and 60% of the GDP are grey and black. The GDP of last year was Tk 5,419,188
million. There is no significant cache of laundering after the AMLA come into force since
2002 and even during much talked activities of DUDAK under emergency rule were not
visible and significant. There is no proper study and estimation of drug consumption
although Bangladesh considered as safe transit country since the administration is corrupt
and have lacking expertise to facing such crimes.
The Task Force on Financial Integrity and Economic Development, a consortium of

Governments and NGOs, focuses on achieving greater transparency in the global financial
system for the benefit of developing countries. Global Financial Integrity, a Washington, DC
based think tank and leader of the Task Force, estimates that the amount of money draining
illicitly out of developing countries into western economies is approximately $850 billion to
$1 trillion a year. These cross-border funds are generated as the proceeds of bribery and theft
by government officials (about 3 percent of the global total, criminal activity such as drug
trading and racketeering (comprising some 30 to 35 percent of the global total), and
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commercial tax evasion accomplished primarily through the mispricing of exports and
imports (by far the largest component at about 60 to 65 percent of the global total).
Reasons of Money Laundering
Criminals engage in money laundering for five main reasons:
First, any sort of criminal activities need investment for financial investment because it
covers operating expenses, replenishes inventories, purchases the services of corrupt
officials to escape detection and further the interests of the illegal enterprise, and pays for an
extravagant lifestyle. To spend money in these ways, criminals must make the money they
derived illegally appear legitimate.
Second, Criminals must obscure or hide the source of their wealth or alternatively
disguise ownership or control to ensure that illicit proceeds are not used to prosecute them
since, a trail of money from an offense to criminals can become incriminating evidence.
Third, the proceeds from crime often become the target of investigation and seizure. To
shield ill- gotten gains from suspicion and protect them from seizure, criminals must conceal
their existence or, alternatively, make them look legitimate.
Fourth, Black money holders would like to have social status of good image and try to
have white money and launder the money to make white. The also enter some other
professions (preferably business) to disguise the dark side of their main profession.
Fifth, Laundering money is a must to re-investment in drug and arms smuggling etc and
transfer within and across boarder. There is no political boundary of criminal activities and
no territorial binding like any legal profession.
How Offence of Money Laundering happen
Money obtained by an illegal action is not, of itself, laundered money. The laundering
offense comes from the attempt to conceal its source, not because the transaction was itself
illegal (which is a separate offense). The money laundering is act of hiding, transferring,
transforming, moving and converting of money or assets and co-operate in those activities
knowingly are truly an offence under any such law around world.
The UK law makes in to a money laundering offence when a person enters into, or
become concerned in, an arrangement which facilitates by whatever means the acquisition,
retention, use, or control of criminal property by another person. This has concerned lawyers
and other professional advisers who act for clients charged with these offences, since they
are brought under the same law themselves.
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The UK legislation was relaxed slightly in 2005 to allow banks and financial institutions
to proceed with low value transactions involving suspected criminal property without
requiring specific consent for every transaction, but the reporting of all probable suspected
transactions is still required.
Bangladesh anti money laundering law silent about professionals and advisers of accused
on the other hand the employees of Banks and Financial institutes are indemnified but liable
for financial penalty only for involvement in transaction and failed to report to Bangladesh
Bank.
As per guide line of Bangladesh bank, the money laundering offences are:
01. It is an offence for any person to obtain, retain, transfer, remit, conceal or invest
moveable or immovable property acquired directly or indirectly through illegal means.
02. Concealing or disguising the property includes concealing or disguising its nature,
source, location, disposition, movement, ownership or any rights with respect to it.
It is an offence for any person to illegally conceal, retain transfer, remit, or invest
moveable or immovable property even when it is earned through perfectly legitimate means.
03. Any individual or entity to provide assistance to a criminal to obtain, retain, transfer,
remit, conceal or invest moveable or immovable property if that person knows or suspects
that those properties are the proceeds of criminal conduct.
04. It is an offence for banks, financial institutions and other institutions engaged in
financial activities not to retain identification and transaction records of their customers.
04. It is an offence for banks, financial institutions and other institutions engaged in
financial activities not to report the knowledge or suspicion of money laundering to
Bangladesh Bank as soon as it is reasonably practicable after the information came to light.
05. It is also an offence for anyone to prejudice an investigation by informing i.e. tipping
off the person who is the subject of a suspicion, or any third party, that a report has been
made, or that the authorities are acting, or are proposing to act, in connection with an
investigation into money laundering. Preliminary enquiries of a customer to verify identity
or to ascertain the source of funds or the precise nature of the transaction being undertaken
will not trigger a tipping off offence before a suspicions report has been submitted in respect
of that customer unless the enquirer knows that an investigation is underway or that the
enquiries are likely to prejudice an investigation. Where it is known or suspected that a
suspicions report has already been disclosed to the authorities and it becomes necessary to
make further enquiries, great care should be taken to ensure that customers do not become
aware that their names have been brought to the attention of the law enforcement agencies.
06. It is an offence for any person to violate any freezing order issued by the Court on
the basis of application made by Bangladesh Bank.
07. It is an offence for any person to express unwillingness, without reasonable grounds
to assist any enquiry officer in connection with an investigation into money laundering
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Dark side of Money Laundering
Corruption in administration, weak Law enforcement, faulty financial regulatory systems

etc are key factors that make certain investment attractive for laundering illicit proceeds by
international drug trafficking and other criminal organizations, Terrorist groups finance their
activities, and even some financial transactions of states undertaking found to evade
international sanctions to acquire technologies and components for weapons of mass
destruction. It is a crime in many jurisdictions with varying definitions. It is a key operation
of the underground economy.
Money laundering has potentially devastating for economy, security, and social stability.
Money laundering is a process vital to making crime worthwhile. It provides the fuel for
drug dealers, smugglers, terrorists, illegal arms dealers, corrupt public officials, On the other
hand corrupt official promote laundering, and others to operate and expand their criminal
enterprises. This drives up the cost of government due to the need for increased law
enforcement and health care expenditures (for example, for treatment of drug addicts) to
combat the serious consequences that result. Crime has become increasingly international in
scope, and the financial aspects of crime have become more complex due to rapid advances
in technology and the globalization of the financial services industry.
Money laundering diminishes government tax revenue and therefore indirectly harms
honest taxpayers. It also makes government tax collection more difficult. This loss of
revenue generally means higher tax rates than would normally be the case if the untaxed
proceeds of crime were legitimate. Citizens also pay more taxes for public works
expenditures inflated by corruption. And those pay taxes pay more because of those who
evade taxes. So we all experience higher costs of living than would if financial crime
including money laundering were prevented.
Money laundering distorts asset and commodity prices and leads to misallocation of
resources. For financial institutions it can lead to an unstable liability base and to unsound
asset structures thereby creating risks of monetary instability and even systemic crises. The
loss of credibility and investor confidence that such crises can bring has the potential of
destabilizing financial systems, particularly in smaller economies.
One of the most serious microeconomic effects of money laundering is felt in the private
sector. Money launderers often use front companies, which co-mingle the proceeds of illicit
activity with legitimate funds, to hide the ill-gotten gains. These front companies have access
to substantial illicit funds, allowing them to subsidize front company products and services
at levels well below market rates. This makes it difficult, if not impossible, for legitimate
business to compete against front companies with subsidized funding, a situation that can
result in the crowding out of private sector business by criminal organizations.
No one knows exactly how much black money flows through the world's financial system
every year, but the amounts involved are undoubtedly huge. In some countries, these illicit
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proceeds dwarf government budgets, resulting in a loss of control of economic policy by

governments. Among its other negative socioeconomic effects, money laundering transfers
economic power from the market, government, and citizens to criminals. Furthermore, the
sheer magnitude of the economic power that accrues to criminals from money laundering has
a corrupting effect on all elements of society. It is said that black money drive out white
money and bad leader drive out good leaders of the society.
Due to the increasing integration of capital markets and the globalization of the financial
services industry, money laundering can even affect interest and exchange rates. Modern
financial systems permit criminals instantly to transfer millions of dollars though personal
computers and Internet connections. Money has been laundered through currency exchange
houses, stock brokerage houses, casinos, insurance companies, and trading companies. The
use of private banking facilities, offshore banking, wire systems, shell corporations, and
trade financing all have the ability to mask illegal activities. The criminal's choice of money
laundering vehicles is only limited by his or her creativity. Because money launderers are
motivated primarily to avoid detection and only secondarily to seek high rates of return on
their “investment,” criminally derived funds are likely to concentrate where controls are
relatively weak. Given the scale of estimated criminal proceeds entering the world economy
each year, then it is easy to see how organized financial crime can distort economies by
reducing tax revenues, causing unfair competition with legitimate businesses, damaging
financial systems, and disrupting economic development. Because money laundering
ultimately can threaten the safety and security of peoples, states and political institutions, the
international community has no choice but to deal firmly and effectively and as much as
possible, in a concerted, orchestrated manner with increasingly elusive, well financed, and
technologically adept criminals who are determined to use every means available to subvert
the financial systems that are the cornerstone of legitimate international commerce.
The social and political costs of laundered money are also serious as laundered money
may be used to corrupt national institutions. Bribing of officials and governments
undermines the moral fabric in society, and, by weakening collective ethical standards,
corrupts the democratic institutions. When money laundering goes unchecked, it encourages
the underlying criminal activity from which such money is generated.
Nations cannot afford to have their reputations and financial institutions tarnished by an
association with money laundering, especially in today's global economy. Money laundering
erodes confidence in financial institutions and the underlying criminal activity like fraud,
counterfeiting, narcotics trafficking, and corruption. It weakens the reputation and standing
of any financial institution.
The civil society is concerned of criminalization of politics, society and economy through
involvement of criminals in politics and other spare of society. Unfortunately they talk
against businessmen not the criminal. There must be a boarder line between businessmen
and criminals. The language of leaders of civil society is perhaps making harm to the society
with their mistaken blame game on business community.
48
Concern about Money Laundering
The United Nations General Assembly adopted in 1996 the UN Declaration against
Corruption and Bribery in International Commercial Transactions. Subsequently the UN
Convention on Transnational Organized Crime was successfully negotiated which came into
force in September 2003. Corruption was a key focus of both. However, by then in view of
the growing international concern about widespread corruption and its adverse effects on
peoples and societies the UN was already actively recognizing the need to establish a
separate comprehensive instrument against corruption. In December 2000 the General
Assembly established an Ad-hoc Committee to negotiate an anti-corruption convention
which would be universal, binding, effective and efficient on the one hand, and flexible
enough on the other, so as to take into account the legal, social, cultural, economic and
political differences between member countries. After two years of negotiations the General
Assembly adopted on October 31, 2003 the United Nations Convention against Corruption
(UNCAC), which was subsequently signed on 9th December 2003, in Merida, Mexico. The
Convention entered into force on 14 December 2005, when the requisite number of
ratifications was achieved. Till date most UN member countries have signed the Convention,
have become State Parties either through ratifications or accession.
All countries including Bangladesh acceded to the UNCAC as they are “convinced and
concerned” about the seriousness of problems and threats posed by corruption to the stability
and security of the societies, undermining the institutions and values of democracy, ethical
values and justice and jeopardizing sustainable development and the rule of law. There links
between corruption and other forms of crime, in particular organized crime and economic
crime, including money laundering. The corruption that involve vast quantities of assets,
which may constitute a substantial proportion of the resources of states, and that threaten the
political stability and sustainable development of those states. The transnational nature of
corruption that affects all societies and economies, an international cooperation became an
urgent need to prevent and control it essential, Government need international co-operation
to detect and deter international transfers of illicitly acquired assets and to strengthen
international cooperation in asset recovery.
The Convention is the first global legally binding instrument on corruption and a
comprehensive document that includes measures on prevention, criminalization and
international cooperation. Representing an international response to corruption as a
transnational phenomenon that affects all societies and economies, making international
cooperation to prevent and control it essential.
The UNCAC has emphasizes prominently on the commitment of the states parties to
promote multi-sectoral institutional, legal and policy reforms at respective national levels as
well as citizens participation as the keystone to creating a strong and sustainable basis for
controlling corruption. It recognizes the cross-border dimension of corruption and affirms
49
that international cooperation is essential to prevent and control the same. The criminals
have no political boundary.
Bangladesh is far behind the compliance of UNCAC convention to reform the legal and
policy reforms and ensure participation of citizens in the process. Bangladesh passed the
money laundering prevention act and Anti terrorism Act but virtually focusing on business
activities which is irritating the businesspersons but not giving attention to real criminal
activities. BB and other organizations are still lagging behind to differentiate the business
and criminal activities exactly in line with thought of the civil society. There are some
business person having black money like many other professionals and there are also some
cover business of criminal activities. They constitute a part of criminals in the society. There
is no reason of utilizing whole strength only against small segment of criminals. Bangladesh
used to report to the UN meetings of the progress of legal and institutional reform and
implementation of conditions of the ratified conventions but that is again a mere compliance
of one condition with out any effective and improved status in practice.
Fighting money laundering
The problem of fighting money laundering is that, the transactions of money launderers
are identical to the transactions conducted every day by legitimate commercial organization
and legitimate deal of assets and properties. Money laundering is often distinguishable from
legitimate buy and sell of properties like similar honest consumers and business activity only
by the context in which it takes place; but understanding the context of a particular financial
transaction is not always a simple matter. The Launderer always pretended to have honest
transaction. Nevertheless, the effort is extremely valuable, for two reasons. First, following
the money trail can produce tremendous opportunities in terms of the identification of actual
owner of the money and tack the leaders of organized crime.
The survey on properties of Dhaka city will reveal that most of the houses and apartments
own by women and also they are mostly housewife by profession. They obtain Tax
identification numbers just before registration of properties and they update their file
declaring source of money as from gift of parents (another offence of dowry). If you try to
go more into the tax file of the parents of the fortunate ladies, the efforts will be futile as
most of parents are not tax payers. Now you can have further study on profession of land
owner’s husbands and their profession. Let some of the readers try to do the research.
Money laundering controls are complex, costly and difficult to administer, and there are
compelling economic and political reasons for governments to limit the extent to which they
impose costly regulations on financial institutions or intrude into the financial affairs of
persons and businesses. In the market oriented economy, all stakeholders like financial
institutions, buyers, lesser, creditors and even competitors keep the confidentiality of
information as business rule and ethics. At the same time, personal financial matters that rely
on the maintenance of banking confidentiality are a key right of citizens in liberal
democracies where bank data is protected by a wide range of laws, both civil and criminal.
50
They cannot reveal personal and company details unless there is specific allegation and/or
suspicious transaction to be reported as per money laundering law in different countries.
The first step against money laundering is the requirement on financial institutions to
know their customers often used term KYC- knows your customer. Financial institutes will
often be able to identify unusual or suspicious behavior, including false identities, unusual
transactions, changing behavior, or other indicators of laundering by knowing their
customers. But for institutions with numerous customers and thousands of customer-contact
employees, traditional ways of knowing their customers must be supplemented by
technology.
The technology may not always a substitute of personal contact to know someone for a
well-trained Banker /investigator, but as money laundering techniques become more
sophisticated, and FI and investigators need updated technology to fight it. Before anti-
money laundering programs became commonplace, in the U.S. the Bank Secrecy Act
required financial institutions to file Currency Transaction Reports for cash transactions of
more than $10,000. These CTRs prove invaluable for investigators, but money launderers
began to structure their transactions to avoid the reporting requirements. As a result, the U.S.
passed laws against structuring transactions to avoid the reporting requirements, and most
structuring would trigger a suspicious activity report by the financial institution.
Bangladesh Bank has anti-money laundering department and have certain instruction to
the Banks and FIs to report certain category of transactions. The binding rule imposed after
activation of money laundering act. BB is empowered to suspend transaction for sake
investigation, ask for clarification of certain source of money and also investigate further and
also refer to Anti corruption commission for further investigation etc. The Bank, other FI,
Insurance company, Money changer, Money transfer company and any other institution
asked by BB are obliged to report all transaction of above Tk 500,000 and above or any
other suspicious transaction to BB. These institutes are obliged to maintain secrecy of any
information which may hamper investigation against money laundering. There is a financial
penalty of non compliance of the rule.
Actions by banks to prevent money laundering are not only a regulatory requirement, but
also an act of self- interest. A bank tainted by money laundering accusations from regulators,
law enforcement agencies, or the press risk likely prosecution, the loss of their good market
reputation, and damaging the reputation of the country. It is very difficult and requires
significant resources to rectify a problem that could be prevented with proper anti-money-
laundering controls. It is generally recognized that effective efforts to combat money
laundering cannot be carried out without the co-operation of financial institutions, their
supervisory authorities and the law enforcement agencies.
FinCEN, Financial Crimes Enforcement Network is an organization created by the

United States Department of the Treasury. FinCEN receives suspicious activity reports from
financial institutions, analyses them, and shares their data with U.S. law enforcement
51
agencies and Financial Intelligence Units (FIUs) of other countries. One of its strategic goals
is to improve information sharing through e-Government. It offers training and advice to
organizations of foreign governments to help improve the efficacy of their own anti-money
laundering programs.
The Financial Action Task Force (FATF) is an inter-governmental body whose purpose is
the development and promotion of national and international policies to combat money
laundering and terrorist financing. The FATF is therefore a 'policy-making body' created in
1989 that works to generate the necessary political will to bring about legislative and
regulatory reforms in these areas. The FATF has published 40 Recommendations in order to
meet this objective. A further 8 principles, designed to counteract funding to terrorist
organizations, were added on 30 June 2003, in response to the 9/11, with another added 22
October 2004, to form what are now known as the (AML/CFT). Compliance with these
principles, or at least a move towards them, is now seen as a requirement of an
internationally active bank or other financial service entity.
There are some organizations working in various aspects of coordinating the

development of anti-money laundering laws and regulations, negotiating bilateral and
multilateral accords to cooperate and exchange information and evidence in support of
money laundering and asset forfeiture investigations, assessing regional threats, advising on
specific policy and administrative changes, and providing increasingly coordinated technical
assistance and logistical support. Because anti-money laundering work is interdisciplinary,
requires both political and bureaucratic discourse, involves both government and
nongovernment actors, and must adapt to and reflect regional conditions, each of these
organizations has an important role to play. There is a similarity in law and rule of anti
money laundering acts throughout the worlds and UNCAC has suggested the law with a
draft to promulgate in different countries. These organizations are the United Nations Office
for Drug Control and Crime Prevention (UNODCCP), the Financial Action Task Force
(FATF), the Caribbean Financial Action Task Force (CFATF), the Organization of American
States Inter-American Drug Control Commission (OAS-CICAD), the Inter-American
Development Bank (IDB), the European Commission, the Council of Europe, the Asia
Pacific Group on Money Laundering (APG), the Offshore Group of Banking Supervisors
(OGBS), the Basle Committee on Banking Supervision, Interpol, the World Customs
Organization (WCO), and the Egmont Group of Financial Intelligence Units. Bangladesh is
no exception and passed the Act as per suggestion of donors and above said organizations. It
has recently applied for membership of Eqmont Group to avail the exchange of information
etc to fight the money laundering etc.
The interests of government in access to financial records and even affirmative disclosure
of suspicious activity, on the other hand, the interests of financial institutions in being free
from unduly burdensome regulation, along with the interests of their customers in
maintaining an appropriate degree of financial privacy. The international community has
52
been struggling toward the development of consensus on how to strike this balance to
concerted international cooperation to combat money laundering began in the late 1980’s.
The United Nations Office for Drug Control and Crime Prevention (UNODCCP). In
1988, the United Nations became the first body to concretely address the global threat of
money laundering, thus beginning of the international fight against money laundering. The
1988 U.N. Convention on Illicit Drugs and Psychotropic Substances has served as the model
drug law which imposes strict penalties for all narcotics related offenses. The UN
Convention pursued the member countries to penalize the offense of drug money laundering.
By this time more that 100 countries already sign the convention, under the convention,
international criminal cooperation including extradition, asset forfeiture, mutual legal
assistance, cooperation between law enforcement agencies, control of precursor and essential
chemicals, and eradication of crops of drugs.
The CFATF has a well-established mutual evaluation program of its own; the Council of
Europe and the Offshore Group of Banking Supervisors have embarked upon similar
programs. And the FATF process is looked upon as a model for other emerging international
conventions, such as the OECD Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions and within the OAS/CICAD discussion of
anti-drugs cooperation. All FATF members now have anti-money laundering legislation
substantially in line with the FATF 40 Recommendations; the FATF membership’s work is
now concentrated on effective implementation of these laws and regulations, and carrying its
message to countries and regions that have not yet fully joined the international effort. Last
year, the FATF formally agreed to -- and received political support for – expansion of its
membership to a limited number of other strategically and economically important countries,
in order both to recognize the anti-money laundering efforts made by these countries and
expand the base of international cooperation in the fight against money laundering. A related
goal is to foster the development of FATF-style regional bodies -- either within already
existing organizations or through the creation of new ones. The CFATF, the Council of
Europe, the Asia Pacific Group on Money Laundering (APG) and the Organization of
American States Drug Control Council (OAS-CICAD) have taken the FATF’s lead,
providing regional leadership and assisting member nations to implement sound anti-money
laundering policies -- in each case, with an understanding of the need to take into account
regional conditions and peculiarities.
In February 1997, the Asia Pacific Group on Money Laundering (APG) was formally
established at the Fourth Asia/Pacific Money Laundering Symposium in Bangkok, Thailand.
Initial membership of the group consists of representatives from Australia, Bangladesh,
China, Japan, New Zealand, Philippines, Singapore, Sri Lanka, Thailand, the United States,
and Vanuatu. This group is the newest “FATF-style” regional body, and a clear sign of
recognition by governments in Asia and the Pacific that money laundering is a significant
international and regional issue. The APG plans to provide a focus for regional anti-money
laundering efforts and will work in close cooperation with the FATF and other regional
53
FATF-style bodies. The first goal of this group is to develop a statement of principles and
measures for application within the region. The Bangkok meeting also resulted in a set of
proposed recommendations and a consensus that money laundering is a serious threat that
must be addressed globally. Participants recognized that money laundering undermines the
integrity of the region's financial institutions and that anti-money laundering controls have a
positive effect on economic growth by attracting legitimate investments and capital. There
was agreement that bank secrecy laws should not interfere with the ability to ensure the
integrity of financial institutions and that central banks and finance ministries play a very
important role. It was also recognized that the offense of money laundering should cover all
serious crimes.
The Offshore Group of Banking Supervisors (OGBS) has endorsed the Basle Committee
on Banking Supervision’s call for information sharing among offshore banking regulatory
authorities for banking violations including money laundering. The OGBS has also agreed to
embark upon a mutual evaluation process.
The “FOPAC Group” of INTERPOL also plays an important international role in the
fight against money laundering. The FOPAC Group focuses on the identification, tracing,
seizure and forfeiture of assets derived from criminal activities. It also conducts awareness
training and money laundering threat assessments throughout Europe. The FOPAC Group
was involved in drafting the Council of Europe Convention, and it has been instrumental in
developing model legislation designed to make it easier to obtain this sort of evidence that is
needed in criminal investigations and proceedings aimed at confiscation of the proceeds of
crime. This model legislation has been distributed to member states so that any government
interested can adapt and adopt it. In pursuit of the aims of this program, a Financial Assets
Encyclopedia has
Also been prepared and distributed to member states, to show the current state of
legislation and law enforcement in different countries.
WCO, the world customs organization is another regular participant in the international
anti-money laundering movement because customs officials must be involved in effective
international anti-money laundering efforts, the willingness of the WCO to participate in the
work of the various international forums, and to provide expert training and technical
assistance for its membership, has contributed significantly to the international effort.
Development of Financial Intelligence Units (FIUs), the Egmont Group. An important recent
development in the international approach to combating money laundering is the creation of
Financial Intelligence Units (FIUs) around the world. An FIU is a centralized unit for
financial intelligence, formed by a nation to protect its financial services sector, to detect
criminal abuse of its financial system, and to ensure adherence to its laws against financial
crime and money laundering. BB has already set up FIU in with the representative of public,
private Bank and other FIs, FIUs has been shaped for two major purposes- law enforcement
and detection. Most countries have implemented anti-money laundering measures alongside
already existing law enforcement systems. Certain countries, due to their size and perhaps
54
the inherent difficulty in investigating money laundering, decided to provide a clearinghouse

for financial information.
The concept of reporting the suspicious transaction has become a standard part of money
laundering detection efforts. FIU act as single office for centralizing this effort in a single
office for receiving, assessing and processing these reports. FIUs established to play the role
of a station between the financial institutions and law enforcement agency like ACC. This
has, since 1995, a number of FIUs have begun working together in an informal organization
known as the Egmont Group. The Egmont Group is a body of experts for exchange of
exchanges of information. The goal of the Group is to provide a forum for FIUs to find ways
of improving support to their respective national anti-money laundering programs. This
support includes expanding and systematizing the exchange of financial intelligence
information, improving expertise and capabilities of personnel employed by such
organizations, and fostering better communication among FIUs through application of
technology. Within the Egmont Group, working groups are focused on four major areas:
legal matters, technology, training, and outreach. One of the most noteworthy, practical
accomplishments of the Egmont Group has been the development of a secure Internet web
site this web site permits Egmont FIUs to access information on other FIUs (missions,
organizations, and capabilities), money laundering trends, financial analysis tools, and
technological developments. It also permits the participating FIUs to communicate by means
of a secure electronic mail system. Since the web site is not accessible to the public, FIUs
may share certain types of sensitive information in this protected environment, a capability
that is not available anywhere else for FIUs. The "Egmont Secure Web" became operational
in February 1997. Nineteen units are currently on-line, and more connections will be made
as FIUs acquire appropriate software and computer configurations. This is an organization of
FIUs of the world.
In 1996, the Egmont Group defined an FIU as: "a central, national agency responsible for
receiving (and, as permitted, requesting), analyzing, and disseminating to the competent
authorities, disclosures of financial information: (i) concerning suspected proceeds of crime,
or (ii) required by national legislation or regulation, in order to counter money laundering."
Since its adoption, the definition appears to have become a standard against which newly
forming units are being measured. At the June 1998 meeting of the Egmont Group in Buenos
Aires, Argentina, the group welcomed new members as fitting the Egmont definition,
bringing the total to 38. Many more FIUs are in planning and development stages around the
world. These new “financial intelligence units” will help increase the scope and global
nature of the fight against money laundering. We hope the FIU in BB will function
effectively after attaining to functional level and get the member ship of Egmont.
FININT, the financial intelligence information gathering intelligence has become more
recognized in combating international crime and terrorism as financial crime has become
more complex. FININT collect transactional data, usually provided by banks as part of
regulatory requirements. Transactions made by certain individuals or entities may be studied.
55
Alternatively, data matching techniques may be employed to identify persons potentially

engaged in a particular activity.
Information developed by these units, when related to domestic security and especially
when state and local law enforcement, is disseminated by the Office of Intelligence and
Analysis (OIA) in the United States Department of Homeland Security, under the Under
Secretary of Homeland Security for Intelligence and Analysis. Bangladesh may have similar
organization with the similar responsibility.
Prevention policy for Bangladesh
The non convertibility of the local currency (the taka) coupled with intense scrutiny on
foreign currency transactions in formal financial institutions also contribute to the popularity
of hundi and money exchange through the black market. Money exchanges outside the
formal banking system are illegal. Offshore financial accounts are not permitted in
Bangladesh. During the last year, there has been a significant increase in the amount of
money transferred through the formal banking system as a result of the efforts by the
Bangladesh Government to increase the efficiency of the process. Bangladesh is may be only
country in the world now having regulatory restriction over inward remittance of business
income. The foreign currency transaction are regulated by Foreign Exchange Control Act
1947, is a very old fashion out dated law and contrary to practical situation and against the
development of economy.
Bangladesh does not have “due diligence” or “banker negligence” laws that make
individual bankers responsible if their institutions launder money.
Bangladesh citizen are not allowed to take more than US$ 3,500 /annum out of the
country while traveling into Bangladesh. There is no limit as to how much currency can be
brought into the country, but amounts over $5,000 must be declared. Many citizens traveling
other countries for medical treatment but the amount are very insignificant. Everybody
knows how the money transferred for these expenses.
Customs duty is bigger revenue income source and import regulations are complicated
and encourage payment by hundi to evade Customs tax on import. This is a widely discussed
issue and need no more elaboration.
Bangladesh should develop appropriate anti corruption effective policies and maintain the
policies that promote the participation of society and reflect the principles of the rule of law,
proper management of public affairs and public property, integrity, transparency and
accountability aiming at the prevention of corruption. Periodically evaluate relevant legal
instruments and administrative measures with a view to determining their adequacy to
prevent and fight corruption. Collaborate with other countries and with relevant international
and regional organizations in promoting and developing the measures referred to in this
56
article. This collaboration may include exchange the information and share the experience of
others for prevention of corruption.
Ensure effective and independent Anti corruption commission, as appropriate, that

prevent corruption and provide resources like material and human and financial to carry out
the functions effectively and free from any undue influence.
Prevention, administrative and legal reform
It is important to fight money laundering Money laundering. There is a fierce,

increasingly global competition in the financial services industry and FIs are more on to
safeguard interest of customers. Money laundering controls are complex, costly and difficult
to administer, and there are compelling economic and political reasons for governments to
limit the extent to which they impose costly regulations on financial institutions or intrude
into the financial affairs of persons and businesses. At the same time, personal financial
matters that rely on the maintenance of banking confidentiality are a key right of citizens in
liberal democracies where bank data is protected by a wide range of laws, both civil and
criminal.” Indeed, what is so bedeviling about the problem of money laundering is that, on
their face, the transactions conducted by money launderers are identical to the transactions
conducted every day by legitimate commercial actors. Money laundering is often
distinguishable from legitimate business activity only by the context in which it takes place;
but understanding the context of a particular financial transaction is not always a simple
matter. Nevertheless, the effort is extremely valuable, for two reasons. First, following the
money trail can produce tremendous opportunities in terms of the identification and ability to
attack the leaders of organized crime. Serious organized crime is conducted in such a way as
to distance the crime leaders from the active participants; but the money always have link
back to the Leaders.
Modern financial systems permit criminals instantly to transfer millions of dollars though
personal computers and Internet connections. Money has been laundered through currency
exchange houses, stock brokerage houses, casinos, insurance companies, and trading
companies. The use of private banking facilities, offshore banking, wire systems, shell
corporations, and trade financing all have the ability to mask illegal activities. The criminal's
choice of money laundering tools is only limited by his or her creativity. Because money
launderers are motivated primarily to avoid detection and only secondarily to seek high rates
of return on their “investment,” criminally derived funds are likely to concentrate where
controls are relatively weak. The international community has no choice but to deal firmly
and effectively and as much as possible, in a concerted, orchestrated manner with
increasingly elusive, well financed, and technologically adept criminals who are determined
to use every means available to subvert the financial systems that are the cornerstone of
legitimate international commerce.
As the financial systems of the world grow increasingly interconnected, international

cooperation has been, and must continue to be, fundamental in curtailing the growing
57
influence on national economies of drug trafficking, financial fraud, other serious

transnational organized crime, and the laundering of proceeds of such crimes. Of course, to
be fully successful, the international response to the problem of money laundering depends
upon political support from the governments of the world. But it should emphasize that most
important international work is being conducted by specialists and experts on global
financial status and opportunity to the people to use openness and technology for economic
activities creating door open for easy money laundering. These experts, from various
financial and regulatory, law enforcement and judicial fields, act together internationally. But
they do so in their own national interests, for the purpose of ensuring the integrity of their
own financial services providers and enforcing national law, as they increasingly understand
that direct cooperation is essential if governments are to have a chance of success in
pursuing criminals and their ill gotten gains from one jurisdiction to another. We have few
experts on this issue to address our own problem. The laws makers hardly consult with
expert rather rely of expert opinion of bureaucrats, who always make a law or regulation to
implement without much efforts ignoring the impact on economy and society.
There is a recent trend of a common supremacy clause in all most all laws. Due to change
is economy and society and complex century old laws, all the new laws conflict with some
old laws and need amendment or improvement of some old laws. But law makers (in
disguise the bureaucrats) have smart solution of supremacy of new law over old laws so that
old laws can exist along new conflicting law.
There are broad five phases of money laundering. The complete laundering of funds is
generally thought to involve three distinct phases, beginning with the placement of illicit
proceeds, usually currency into a financial institution (placement), continuing with the
movement of funds from institution to institution to hide the source and ownership of the
funds (layering), and concluding with the reinvestment of those funds in an ostensibly
legitimate business or in properties (integration). to reflect the fact that cash is often
introduced to the economy via commercial concerns which may knowingly or not knowingly
be part of the laundering scheme, and it is these ultimately not traceable (hiding). The money
launderer uses transfers, sales and purchase of assets, and changes the shape and size of the
lump of money so as to obfuscate the trail between money and crime or money and criminal
(move) and the criminals spend the money in assets, lifestyle and comfort (invest). While
countermeasures to all three components of money laundering are important, laundered
money is generally most vulnerable to detection at the placement stage. As a consequence,
international regulatory and law enforcement efforts have concentrated especially on
developing methods to make it difficult to place illicit funds without detection by developing
measures such as mandatory record-keeping and even reporting of large or unusual currency
transactions, “know your customer” and suspicious transaction reporting requirements, and
cross-border monetary declaration requirements. International standards to discourage
layering have also begun to develop, through a focus on increased transparency in financial
systems generally and through increased recognition of the need to eliminate techniques,
such as the use of nominees and numbered accounts to disguise the actual ownership of
58
assets. Likewise, there has been growing international recognition that bank secrecy rules
must give way to permit law enforcement agencies to review financial records in cases
where there is an active criminal investigation pertaining to the source of the funds. Finally,
integration of illicit proceeds can be fought through the strengthening of asset forfeiture
laws, by which governments can seize the proceeds of criminal activity even when those
proceeds have been reinvested in ostensibly legitimate enterprises. Many states are currently
working to improve methods by which asset forfeiture regimes, and asset sharing among law
enforcement agencies of different countries, to make it more difficult for criminals to protect
their money from the law.
The efforts to combat it must always realistically be geared toward containment, rather
than elimination, of the problem. Given this fact, and there are some standard actions to
prevent it by enacting law to Criminalizing Drug and other Money Laundering, Recording
Large Transactions by law or regulation, Maintaining Records for a specified period of time,
e.g., five years. Reporting suspicious Transactions, setting up Financial Intelligence Unit
having wide jurisdiction of establishing an operative central, national agency responsible for
receiving and permitting exchange of information, analyzing, and disseminating to the
competent authorities disclosures of financial information concerning suspected proceeds of
crime, or required by national legislation or regulation, in order to counter money
laundering. System for Identifying and Forfeiting Assets. The law should have jurisdiction of
authorizing the tracing, freezing, seizure and forfeiture of assets identified as relating to or
generated by money laundering activities. Arrangements for regulation or bilateral
agreement, the jurisdiction permits sharing of seized assets with third party jurisdictions
which assisted in the conduct of the underlying investigation. Cooperation with International
Law Enforcement including sharing of records or other financial data Have law or regulation
for cooperation with banks, controls or monitors the flow of currency and monetary
instruments crossing its borders. By law or through treaty to agreed to provide and receive
mutual legal assistance, including the sharing of records and data. The non bank financial
institutions, insurance and other similar institutions to meet the same customer identification
standards and adhere to the same reporting requirements that it imposes on banks
criminalizing the support to terrorists and/or terrorist organizations etc
Money laundering is a corruption or endeavor of hiding one corruption is another offence

but seems part of economy. This observation is more appropriate for most corrupt country
like Bangladesh. The MLPA is more to punish the responsible for laundering. Bangladesh
and other countries require prevention of laundering. The money laundering mean transfer to
black money earned through corruption. There is urgent need to prevention corruption to
prevent money laundering. UNCAC have specific recommendation for prevention of
corruption through regulatory reform not like dramatic action of past care taker government,
who created a sensation by taking action against certain corrupt person but the real remedy
lies with regulatory reform. UN is more concern of reform in administration than
punishment of money launderer. Bangladesh is advised and monitored by the UN, donor
agencies and friendly western countries to reform the administration. Their loan and grants
59
are subject to condition of regulatory reform. Our thrust for loan virtually compelled to abide
by advice of donors.
Prevention of corruption is significant strategies; effective policies and mechanism for a

state toward the combating of corruption are fundamentals to achieve the target of anti
money laundering. The business community and legal experts of UK were involved in the
policy making process to make it more pragmatic. The donors and UN are aware of our
reluctance and shortcomings and suggest addressing flaws corruption through preventive
measures that reduce opportunities for corruption. Corruption thrives on systemic
weaknesses; consequently anti-corruption preventive measures are best solutions of
corruption. The measures in public sector are recruitment, retention, promotion and code of
conduct for public officials and public procurement and management of public finances are
some of the preventive anti-corruption policies and practices, The effective anti-corruption
policies be developed, maintain and implement such a manner that encourage the
participation of society, reflect the rule of law and promote sound and transparent
administration. UNCAC urges the States members to develop and implement or maintain
effective anti-corruption policies that encourage the participation of society, reflect the rule
of law and promote sound and transparent administration of public affairs. States are also
required to collaborate with each other and with relevant international and regional bodies.
There are of some Acts in particularly the Anti-Corruption Commission (ACC) Act 2004,
Anti-Corruption Commission (ACC) Rules 2007, and the Prevention of Corruption Act
(PCA) 1947. The ACC Act, 2004 updated up dated by caretaker government and also the
present AL government to prevent corruption and other corrupt practices in the country and
the overall framework to conduct enquiry and investigation for specific offences. This is
major step toward reforms for good governance and fighting corruption and although not up
to international standards. Article 6 of the UNCAC requires the States members to have
anticorruption body in charge of preventive measures and policies and to grant that body
independence to ensure that it can do its job unimpeded by undue influences and provide it
with adequate resources etc.
We hope ACC under new Chairman will have free hand to handle the anticorruption drive
under the political government. In December 2007, Transparency International Bangladesh
(TIB) and the DUDAK jointly started an anti-corruption campaign program and hopefully
created awareness about corruption. The common people and civil society had good wishes
for the awareness Champaign of DUDAK.
Regulatory Reform Commission and Better Business Forum, created in October 2007,
these are responsible for promoting changes in administrative rules and regulations with a
view to making them investment, commerce and trade friendly. There recommendations are
not binding on any government department. There suggestion may be implemented by the
Government through change in Law and Rule. These two organizations still not performing
well. They are not well equipped with manpower and other facilities. These are still manned
with deputed officials from administration interested for posting in Dhaka city. These
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organizations have a policy of consensus on reform about stakeholders. There is no reason

why the regulators will agree to reform causing a loss of authority over certain community or
class of people. This reform commission should take their decision and recommend to
Government for taking action. There should be more dedicated and expert personnel in these
two organizations in order to achieve desired outcome.
Private sector
Bangladesh shall take measures to prevent corruption involving the private sector,
enhance accounting and auditing standards in the private sector and, provide effective,
proportionate and dissuasive civil, administrative or criminal penalties for failure to comply
with such measures. Such measures may include, inter alia: Promoting cooperation between
law enforcement agencies and relevant private entities; Promoting the development of
standards and procedures designed to safeguard the integrity of relevant private entities,
including codes of conduct for the correct, honorable and proper performance of the
activities of business and all relevant professions and the prevention of conflicts of interest,
and for the promotion of the use of good commercial practices among businesses and in the
contractual relations of businesses with the State; Promoting transparency among private
entities, including, where appropriate, measures regarding the identity of legal and natural
persons involved in the establishment and management of corporate entities; Preventing the
misuse of procedures regulating private entities, including procedures regarding subsidies
and licenses granted by public authorities for commercial activities; Preventing conflicts of
interest by imposing restrictions, as appropriate and for a reasonable period of time, on the
professional activities of former public officials or on the employment of public officials by
the private sector after their resignation or retirement, where such activities or employment
relate directly to the functions held or supervised by those public officials during their
tenure; Ensuring that private enterprises, taking into account their structure and size, have
sufficient internal auditing controls to assist in preventing and detecting acts of corruption
and that the accounts and required financial statements of such private enterprises are subject
to appropriate auditing and certification procedures. The business community should involve
in policy making and implementation stage for more transparency and close co-operation.
To promote private sector integrity Bangladesh shall also take such measures as may be
necessary, regarding the maintenance of books and records, financial statement disclosures
and accounting and auditing standards, to prohibit the following acts carried out for the
purpose of committing any of the offences established in accordance with this Convention:
Establishment of off-the-books accounts; Making of off-the-books or inadequately identified
transactions; Recording of non-existent expenditure; Entry of liabilities with incorrect
identification of their objects; Use of false documents; and Intentional destruction of
bookkeeping documents earlier than foreseen by law. These are possible through regulatory
reform and participation of business community in the process.
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Public Service
Bangladesh do not have public sector recruitment, hiring, retention, promotion and
conduct policy of market economy sovereign country and inherited from colonial era, Article
133 of Constitution of Bangladesh requires the state to enact laws and procedures “to
regulate the appointment and conditions of service of persons in the service of the Republic”.
The regulatory regime includes the Bangladesh Civil Service Recruitment (BCSR) Rules
1981; Bangladesh Civil Service Recruitment (Age, Qualification and Examination for Direct
Recruitment) Rules 1982; the Bangladesh Public Service Commission Ordinance,
Bangladesh Civil Service (Examination for Promotion) Rules, 1986, Administrative Tribunal
Act, 1980, Officers and Staff (Administrative Tribunal) Recruitment Rules, 1985. These are
old wines in new bottles.
The recruitment, hiring, retention, promotion, retirement of the civil servants should be
based on principles of efficiency, transparency and objective criteria considering merit,
equity and aptitude. Public officials need adequate training and education programs to
enhance performance of their public duties and functions including specialized and
appropriate training to increase their awareness of the risks of corruption and improve the
moral to avoid corruption.
Public servants require and entitled to adequate remuneration and equitable pay scales,
taking into account the economic development of the country. Since the independence of
Bangladesh a number of National Pay Commissions (NPC) were set up for ascertaining pay
scales for public servants. The first NPC was set up in 1972 when the civil service structured
into ten grades, subsequently, in 1977 upgraded into twenty grades. The current pay scale is
based on the recommendations of the sixth National Pay Commission report in 2005. The
7th National pay commission installed by NPCT government has recently submitted their
report.
Bangladesh needs a permanent Pay Commission for updating the government on this
important issue.
The recruitment and promotions practices of public officials have come under criticism
from time to time, the image of PSC as a constitutional body has at times been compromised
with the cancellation of examinations and assertions of political affiliation in recruitments.
This has weakened the high standing of the civil service. This body should improve and
steps toward institutional reforms toward strengthening of constitutional bodies such as the
PSC. The process of modernizing a long drawn and antiquated examination system that is
aimed to improve the quality of new recruits. Measures could also be considered to improve
the independence, effectiveness and efficiency of the service with greater financial
autonomy, training and capacity building, opportunities for deputation and lateral entry and
technical support to improve administrative systems.
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There should be practical programs to promote moral, integrity, honesty and

responsibility among public officials and codes or standards of conduct for the correct,
honorable and proper performance of public functions. Article 5-33 of the Government
Servants (Conduct) Rules 1979; clearly provide guidelines for behavior and conduct of
public officials in the civil service. They include issues like acceptance of awards and gifts,
public demonstration of honor to government, rising of funds on behalf of the government,
disclosure of assets and speculation of investment, lending, borrowing buying or selling
valuable properties, private trade and employment. Contraventions of Rules are dealt with
provisions of the Government Servants (Discipline and Appeal) Rules 1985, making
violations liable to inquiry and punishment, if proved. But this rule seems not functioning
well or not implementing in proper manner.
The Foreign Exchange Rules does not impose any restrictions on Bangladeshi nationals
for maintaining foreign accounts, nor are they required to report the existence of such
accounts. With regard to reporting of foreign accounts held by public officials, in accordance
with the provisions of the Government Servant Conduct Rules, 1979, public officials are
under a duty to submit the details of their wealth including bank accounts. The UNCAC
requires financial institutions of a State country to verify the identity of customers or the
beneficial owner of high-value account of public officials and their family members and
close associates. In addition, it requires public officials having foreign accounts to report it
to relevant authority and also ensure that its financial institutions (FI) maintain transaction
records of such persons for an appropriate period. States are also required to establish
effective financial disclosure systems and provide appropriate sanctions for non-compliance.
Financial institutions are also discouraged from dealing with banks that have no physical
presence.
Regarding the offences by the public officials, chapter IX of the Penal Code deals with
the offences. Section 161 addresses issues like public servants taking gratification other than
legal remuneration in respect of an official act. Section 162 and 163 also deals with the
corruption of public servants. Moreover the ACC Act, 2004 provides guidelines for
investigation of corruption cases of any individual or institution. There is a move and the
cabinet has on principle agreed to amend the law of ACC to make mandatory to take prior
approval of Government before investigation against a government servant. This will
encourage the corruption and black money.
There is a rule in paper requiring public officials to declare to appropriate authorities

outside activities, employment, investments, assets and substantial gifts or benefits received
from which a conflict of interest may arise. In accordance with Rule 13 of the Government
Servants (Conduct) Rules, 1979, public officials are required to provide statements of wealth
at the time of recruitment that would include any moveable and/or immoveable assets. They
are also required to provide an annual update of such assets. By implication this would
include assets located in Bangladesh and/or abroad. Furthermore the government can also
ask for a statement of their liquid assets from any public official under rule 14 of the same
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Rules. Moreover, Sections 168 and 169 of the Penal Code 1860, provides penal provisions
for public officials engaging in unlawful trade, bidding or buying of any property. Both the
sections strictly recommend imprisonment for the violation of the laws. In practice
submissions of wealth statements at the time of recruitment of public officials have been
maintained while the submission of annual updates has been irregular.
Public offices and transparency in funding in election etc
Bangladesh gradually having credible election process although the system not seems
permanent as perceive by common people. There is a debate going on to maintain or not
maintain the provision caretaker Government during future general election.
The election to the Public office should be through transparent and credible election.
Bangladesh should take appropriate measures for implementing the already set criteria
concerning candidature for and election to public office and to enhance transparency in the
funding of candidatures and election Champaign for elected public office. Our political
parties are not obliged to transparently account for the source of funds and actual expenses.
EC issued rule for mandatory declaration of sources of election expenditure, ban on

receiving funds from foreign sources and submission by individuals and political parties of
details of election related expenditures within sixty days of the declaration of election
results. But the recent election experience shows that the rules are not sufficient to make the
process transparent and accountable. Bangladesh need more time to change mentality of
candidates and voters to strictly adhere to this rule. Voters expect some entertainment from
candidates. The election campaign has become profession of some people and the economy
gets a stimulus after every five years.
It has become part of society and economy and also culture. There is better outcome only
from criticism of politicians.
The Article 66 of constitution lays down clear criteria for the disqualification of
candidates in elections; these include declaration by a competent court of unsoundness of
mind, insolvency, taking allegiance in a foreign country, and conviction for a criminal
offence involving moral turpitude. A person will also be considered to be eligible if
imprisoned for two years and above and a period of five years has not elapsed since his/her
release. The Representation of the People’s Order (RPO) 1972 has amended to impose some
more restriction or bar on candidature of Loan defaulters (except for house-building
purposes) and utilities bill defaulters. The public servants, who have resigned retired or have
been removed forcefully by way of dismissal or suspension, will be considered ineligible if
an intervening period of three years has not elapsed from such actions taken against them.
This is also applicable for employees of the nongovernmental organizations. There is no
valid reason why the house loan defaulters shall be eligible for election unlike industrial loan
defaulters. The money taken as loan by industrialist and house owners are from same cash
box of banks.
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The Supreme Court of Bangladesh in the landmark case of Mr. Abu Safa Vs The Election
Commission, 2007 has confirmed the of mandatory public disclosure of eight types of
personal information by electoral candidates that include: academic qualifications, any
pending criminal proceeding(s), records of criminal cases, if any and their outcome, source
of income, assets and liabilities, amounts of loan taken from banks and financial institutions
(personally, jointly or by a dependent).
BB Circular No. 14 ( 25 September, 2007) requires enhanced security of accounts of

Politically Exposed Persons (PEPs) i.e. public officials with prominent public functions in
foreign countries and accounts maintained by suspects of corruption. In compliance with
UNCAC provisions and the recommendations of Financial Action Task Force (FATF) banks
have been instructed to have risk management systems for identifying PEPs including
approval from senior management for entering into business relationship with such persons;
take reasonable measures to establish sources of wealth and funds and conduct ongoing
monitoring of such relationship.
Public Procurement
The government use to buy approximately US$ 3 billion per year of government
procurement. A high percentage of the annual volume of public procurement in Bangladesh
is externally funded, Government has been advised by donors to have procurement Act but
recent past government has issued Public Procurement Regulations 2003 (PPR), and the
Public Procurement Processing and Approval Procedures 2004 (PPPAP). The Government
also approved the implementation of the “Public Procurement Reform Project” (PPRP I)
with WB assistance for improving governance in public procurement. A Central
Procurement Technical Unit (CPTU) within the IMED, was established under the. Ministry
of Planning which is in charge of monitoring of procurement processes. Government should
take necessary steps to establish appropriate systems of procurement, based on transparency,
competition and objective criteria in decision making that are effective for the prevention of
corruption. These include the public distribution of information relating to procurement
procedures and contracts, information to tender and on the award of contracts; establishment
of conditions of participation including selection and award criteria; the use of objective and
predetermined criteria for public procurement decisions; an effective system of domestic
review including an effective system of appeal; and rules regarding declaration of interest in
particular public procurements and screening procedures. By this time there are some
changes to improve the process but unfortunately the present government has changes some
of the rule to make the procurement easier reportedly for quick decision for implementation
of projects on time. The donors already expressed their concern.
The Right of Information Act 2009 has been passed and effective from 1st July 2009. Let
us see the improvement in transparency in public procurements. The management
information system should be improved for greater transparency on procurement in
government and autonomous bodies. The planned e-governance (E-GP) may cut down costs
and promote transparency.
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Public Finances
Article 127 of the Constitution provides the establishment of the Office of the
Comptroller and Auditor General (CAG) for the management of all public finances and
related oversight of all public institutions. In accordance with Article 128 of the Constitution
the CAG prepares the audit report of all public accounts of the Republic including revenue
and expenditures, and is required to present it to the Head of the State, i.e. of the President of
Bangladesh (Article 132 of the Constitution). The report is then placed before the Public
Accounts Committee (PAC) for scrutiny and discussion by the Parliament. CAG is also
constitutionally mandated as the Supreme Auditing Institute (SAI) for financial audits,
compliance, regulatory and performance audits.
The transactions of public funds required to more transparency and accountability in the
management of public finances should have more accountability. The measure of
transparency and accountability should include procedures for the preparation and adoption
of the national budget, timely reporting on revenue and expenditure, appropriate systems of
accounting and auditing standards, related oversight, risk management and internal control.
Existing auditing standards and reporting standards, code of ethics for government auditing
and financial management rules are questionable. They the audit objection, adoption of
report and then action as per their report are so late that in most of the occasion the official
responsible use to retire and no visible action taken against them. There is a urgent need of
improvements are necessary to strengthening auditing systems, that could include the
adopting of the IPSAS (International Public Sector Accounting Standards), providing
customized internal control manuals for different Ministries (such as that in the Ministry of
Finance).
Bribery
The Bangladesh Penal Code, 1860 criminalizes the act of taking by a public servant of
any gratification other than legal remuneration in respect of an official act (section 161), the
act of obtaining by a public servant of any valuable thing without consideration from person
concerned in proceeding or business transacted by such public servant (section 165), and any
abetment, i.e., instigating or aiding, by any person of any such taking or obtaining (section
165A). Moreover, according to the Prevention of Corruption Act, 1947, the act of accepting
or obtaining by a public servant of any gratification other than legal remuneration in respect
of an official act (section 5(1) (a), and the act of accepting or obtaining by a public servant of
any valuable thing without consideration from person concerned in proceeding or business
transacted by such public servant (section 5(1) (b) amount to punishable criminal
misconduct. These penal provisions adequately address the UNCAC requirements regarding
active and passive bribery of national public officials. However, there is no domestic law
categorically criminalizing active bribery of foreign public officials and officials of public
international organizations as required by article 16, paragraph 1 of the UNCAC. So far
passive bribery of foreign public officials and officials of public international organizations
and bribery (active or passive) in the private sector are concerned; the UNCAC standard is
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yet to be translated into the domestic laws of Bangladesh. Unfortunately the despite
criminalization of bribery Bangladesh is most corrupt country in the world. We should
address the issue immediately.
Embezzlement, misappropriation of property
The Penal Code criminalizes the act of dishonest misappropriation of property (section
403) and criminal breach of trust by public servant (section 409). Regarding ‘Embezzlement,
misappropriation or other diversion of property by a government official’ (article 17), is an
offence. These offences, as their definitions indicate, include embezzlement,
misappropriation or other diversion of property by a public official. Moreover, according to
the Prevention of Corruption Act, 1947, the act of dishonest or fraudulent misappropriation
or conversion by a public servant for his own use any property entrusted to him or under his
control as a public servant or allowing any other person so to do is a punishable criminal
misconduct (section 5(1)(c)). On the other hand, definitions of the offences of dishonest
misappropriation of property (section 403) and criminal breach of trust (section 406) as
criminalized by the Penal Code, 1860, include embezzlement of property by a person
directing or working in a private sector entity. Accordingly embezzlement of property in the
private sector is also punishable under the penal laws in Bangladesh. We hardly see any
application of Prevention of Corruption Act, 1947 in Bangladesh. The law may be in safe
custody of government file in court and anticorruption department.
Liability of legal or artificial persons
UNCAC requires the establishment of criminal, civil or administrative liability for legal
entities for the UNCAC offences. This obligation is mandatory, to the extent that this is
consistent with domestic legal principles. The definition of the term ‘person’, as provided by
the Penal Code, 1860, includes legal persons (section 11). Accordingly, in Bangladesh, legal
persons are amenable to criminal punishment for offences punishable with fine only.
Additionally, civil and administrative liability of legal persons is acknowledged by the
domestic legal regime. It may be amended to make criminal and administrative liability as
per obligatory suggestion of UNCAC.
Recovery of property through international cooperation in confiscation
Bangladesh has signed a couple of memorandum of understanding with Singapore and

Malaysia in this regard. In order to provide mutual legal assistance with respect to
confiscation, freezing and seizure of any property of foreign origin will permit to give effect
to an order of confiscation, freezing and seizure by a court of another country should that
property be acquired through an offence under the UN Convention. Rule 18 of the ACC
Rules, confers powers to the courts to order the freezing or attachment of the property of a
person that is allegedly acquired by illegal means or is disproportionate to his/her legal
source of income even before the commencement of trial on request from an investigating
officer of the ACC. Under sections 14 of the MLPA 2009, the courts may seize or freeze the
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property of a person accused of money laundering on application of ACC. However these

provisions are not applicable for foreign court orders, such compliance will require an
agreement of mutual legal assistance with other countries.
Bangladesh has committed to adopt such legislative and other measures as may be
necessary to establish as criminal offences the following acts: bribery of national public
officials; bribery of foreign public officials and officials of public international
organizations; embezzlement, misappropriation or other diversion of property by a public
official; trading in influence; abuse of functions; Illicit enrichment; bribery in the private
sector; embezzlement of property in the private sector; laundering of proceeds of crime;
concealment; and obstruction of justice as per UNCAC charter.
National Integrity Strategy
The Government of Bangladesh acceded to the United Nations Convention against

Corruption (UNCAC) and prepared a comprehensive report on the domestic institutions that
could support implementation of the Convention. This report on UNCAC highlighted that
corruption thrives on systemic weaknesses. National Integrity Strategy (NIS) is a
comprehensive set of goals, strategies and action plans aimed at increasing the level of
independence to perform, accountability, efficiency, transparency and effectiveness of state
and non-state institutions in a sustained manner over a period of time. The integrity system
comprises both State and non-state institutions. In facilitating application of the NIS, the
Government wishes to engage not only the State institutions such as Parliament, the
Executive, the Judiciary, Public Services, Local Government, Attorney Services, Public
Service Commission, Election Commission, Anti-Corruption Commission, Office of the
Comptroller and Auditor General, and Office of the Ombudsman but also the non-State
institutions including civil society, political parties, NGOs, private sector, and the media.
Furthermore, State and non-State educational and religious institutions will also be key
players of NIS. NIS Vision and Mission: The Government’s vision for the country, as
contained in the NIS, is ‘A Bangladesh free from corruption’. To that end, the Government is
committed to implement the NIS to achieve the Mission that ‘People and institutions
embrace values and principles of integrity, and increasingly practice them as part of their
individual and institutional activities’. Government to pass Right to Information Ordinance
and not yet established Government to establish Local Government Commission, Capacity
building support to Cabinet Division and respective Ethics Focal Points in different
institutions.
Countermeasures
The international effort to develop and implement effective anti-money laundering

controls has been marked by the persistent, ever present need to balance, on the one hand,
the interests of government in access to financial records and even affirmative disclosure of
suspicious activity, against, on the other hand, the interests of financial institutions in being
free from unduly burdensome regulation, along with the interests of their customers in
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maintaining an appropriate degree of financial privacy. The international community has

been struggling toward the development of consensus on how to strike this balance.
Concerted international cooperation to combat money laundering began in the late 1980’s.
Today, a panoply of international organizations -- the United Nations Office for Drug
Control and Crime Prevention (UNODCCP), the Financial Action Task Force (FATF), the
Caribbean Financial Action Task Force (CFATF), the Organization of American States Inter-
American Drug Control Commission (OAS-CICAD),
the Inter-American Development Bank (IDB), the European Commission, the Council of
Europe, the Asia Pacific Group on Money Laundering (APG), the Offshore Group of
Banking Supervisors (OGBS), the Basle Committee on Banking Supervision, Interpol, the
World Customs Organization (WCO), and the Egmont Group of Financial Intelligence Units
are involved in various aspects of coordinating the development of anti-money laundering
laws and regulations, negotiating bilateral and multilateral accords to cooperate and
exchange information and evidence in support of money laundering and asset forfeiture
investigations, assessing regional threats, advising on specific policy and administrative
changes, and providing increasingly coordinated technical assistance and logistical support.
Because anti-money laundering work is
Interdisciplinary, requires both political and bureaucratic discourse, involves both

government and nongovernment actors, and must adapt to and reflect regional conditions,
each of these organizations has an important role to play. The remainder of this paper briefly
describes the main activities and accomplishments of these various multilateral efforts.
The United Nations Office for Drug Control and Crime Prevention (UNODCCP). In
1988, the United Nations became the first body to concretely address the global threat of
money laundering, thus beginning in earnest the international fight against money
laundering. The 1988 U.N. Convention on Illicit Drugs and Psychotropic Substances has
served as the model drug law which imposes strict penalties for all narcotics related offenses.
Collateral to the logic of supply side narcotics control is the desire to use the money trail to
catch offenders, confiscate their assets, and prevent and deter them from engaging in further
criminal activity. Thus, the UN Convention obliges parties to penalize the offense of drug
money laundering. Signed by more that 100 countries, it requires international criminal
cooperation including extradition, asset forfeiture, mutual legal assistance, cooperation
between law enforcement agencies, control of precursor and essential chemicals, and crop
eradication. It also states that a requested country cannot refuse to render mutual legal
assistance on the grounds of bank secrecy. Although the UNODCCP’s program activities
over the years since the Convention have focused primarily on narcotics control and
eradication, under the leadership of Pino Arlacchi, the UNODCCP in 1997
Established the Global Programmed Against Money-Laundering, a three-year research

and technical assistance program to help coordinate international efforts. The
implementation of the Global Programmed is carried out
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In the spirit of cooperation with other international, regional and national organizations
and institutions. (As evidenced by this symposium, it also is actively supported by affiliated
organizations such as the International Centre for Criminal Law Reform & Criminal Justice
Policy.) The main pillar of the program is technical cooperation, encompassing activities of
awareness-raising, institution building and training. A second, research and analysis pillar
aims at offering States key information to better understand the phenomenon of money
laundering and to enable the international community to elaborate more efficient
countermeasure strategies.5 Finally, a recent commitment to support the establishment of
financial intelligence and investigation services will contribute to raising the overall
effectiveness of law enforcement measures.
In June 1998, as part of the special session of the UN General Assembly to commemorate
the 10th anniversary of the 1988 Convention, the UN issued a political statement that
recognized anew the importance of anti-money laundering controls and pointed specifically
to the 40 Recommendations of the Financial Action Task Force as the most complete
articulation of best practices in the anti-money laundering area. Also, the United Nations has
recently begun deliberations toward a new, overarching convention to combat transnational
organized crime. When completed, this convention is expected to contain an article
providing for the criminalization of money laundering for all “serious crimes”, and an article
or a protocol addressing civil anti-money laundering controls.
The Financial Action Task Force (FATF). Whereas the UN Convention of 1988 represents
the first significant international accord concerning money laundering, the Financial Action
Task Force (FATF), since its creation in 1989, has lead the world in the development and
implementation of anti-money laundering policies. The G-7 established FATF largely in
response to the U.N. Convention, and specifically to articulate steps that governments and
financial institutions need to take to combat money laundering effectively. The FATF
currently consists of 26 jurisdictions and two international organizations. Its membership
includes the major financial center countries of Europe, North America and Asia. 6 One of
the guiding principles of the FATF is that money laundering is a complex economic crime
that cannot be effectively controlled by conventional law enforcement methods alone.
Accordingly, finance ministries, central banks, financial institutions, and financial regulators
must work closely with law enforcement officials and prosecutors in combating money
laundering. In 1990 the FATF issued its now well known 40 Recommendations; these
Recommendations were revised and updated in 1996. The FATF
Recommendations are thought to constitute a systemic, “best practices” approach to a

difficult problem; as such they call for a range of undertakings by various functions of
government as well as financial service providers. Although no single recommendation is
thought to be less important than any other, a few core principles emerge from the whole.
First, countries should criminalize money laundering, not just from drug offenses, but
from all “serious crimes”.
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Second, in order both to protect themselves from abuse and to allow law enforcement and
regulatory authorities a window into the financial activity of suspected criminals, banks and
other financial institutions should be required:
To know and record the true identity of their customers,

To record the details of large currency transactions,
To report suspicious transactions,
To maintain, for an adequate time, records necessary to reconstruct significant transactions,
To respond to information requests from appropriate government authorities. Perhaps the
most important safeguard against money laundering is the integrity of a financial
institution’s management and their vigilant determination to prevent their institutions
from being used by criminals. In order to ensure that financial institutions are able to
take these recommended steps without fear of reprisal, however, the FATF further
recommends that financial institutions be prohibited from notifying any person about
whom a report is made, and that they be protected against liability arising out of their
compliance with their reporting obligation.
Third, governments should establish systems for identifying, tracing, freezing, seizing
and forfeiting assets. As a corollary to this principle, governments need to be in a position to
cooperate effectively with their international partners to exchange evidence and share seized
proceeds of crime.
Finally, as countries have increased regulations and diligence within financial institutions,
criminals have learned to use other, less regulated industries to launder their money.
Therefore, the FATF recommends that governments apply these countermeasures and
diligence to non-financial sectors and businesses, as appropriate, and remain vigilant with
respect to emerging threats. In this connection, the FATF and other international bodies are
currently involved in significant policy discussions concerning the emergence of new
payment technologies, the role of non-financial professionals such as lawyers and
accountants -- in money laundering schemes and the use of alternative remittance systems or
“underground” banking. What began in a political environment quickly became a non-
political movement in the FATF. The FATF brings legal, financial and law enforcement
experts into the policy-making process, and provides room in its agenda for a wide range of
issues. Thus, for example, FATF’s work includes an annual law enforcement typologies
exercise, an ongoing dialogue with private sector representatives concerning such matters as
feedback on suspicious activity reports, and an ad hoc committee (staffed largely by
economists and statisticians) grappling with the problems associated with the ongoing effort
to measure the magnitude of money laundering around the world. The value of the expert
level -- as opposed to political -- discussion is particularly evident in the FATF’s mutual
evaluation process. This process involves regular peer review and discussion of FATF
member countries’ progress toward full implementation of the 40 Recommendations.
Reviews entail
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Responses to questionnaires, interviews with officials and financial services providers,

written reports of findings, and discussion and critique of those reports in plenary meetings.
The mutual evaluations proceed in a collegial manner, and allow specialists -- not politicians
-- from the regulatory, legal, and judiciary fields to share their expertise and provide useful
insights concerning their colleagues’ efforts to implement sound antimony laundering
policies. The mutual evaluation process has been key to the progress made by member
states, and thus to the FATF’s credibility as a body. The FATF mutual evaluation process has
been or is
Being copied by other FATF-style regional bodies implementing or about to implement

similar evaluation programs. The CFATF, for example, has a well-established mutual
evaluation program of its own; the Council of Europe and the Offshore Group of Banking
Supervisors have embarked upon similar programs. And the FATF process is looked upon as
a model for other emerging international conventions, such as the OECD Convention on
Combating Bribery of Foreign Public Officials in International Business Transactions and
within the OAS/CICAD discussion of anti-drugs cooperation. All FATF members now have
anti-money laundering legislation substantially in line with the FATF 40 Recommendations;
the FATF membership’s work is now concentrated on effective implementation of these laws
and regulations, and carrying its message to countries and regions that have not yet fully
joined the international effort. Last year, the FATF formally agreed to -- and received
political support for – expansion of its membership to a limited number of other strategically
and economically important countries, in order both to recognize the anti-money laundering
efforts made by these countries and expand the base of international cooperation in the fight
against money laundering. A related goal is to foster the development of FATF-style regional
bodies -- either within already existing organizations or through the creation of new ones.
The CFATF, the Council of Europe, the Asia Pacific Group on Money Laundering (APG)
and the Organization of American States Drug Control Council (OAS-CICAD) have taken
the FATF’s lead, providing regional leadership and assisting member nations to implement
sound anti-money laundering policies -- in each case, with an understanding of the need to
take
Into account regional conditions and peculiarities.
European Commission / European Union. In June 1991 the Council of the European
Commission (EC), and now the European Union (EU) adopted the “Directive on Prevention
of the Use of the Financial System for the Purpose of Money Laundering.” This directive
emphasizes proper “know your customer” and record
Keeping requirements for financial institutions. The EC remains an active member of the
FATF and is actively involved in supporting regional training and technical assistance efforts
in the field, as well. Council of Europe. The Council of Europe was founded in 1949 to
foster greater cooperation and unity among the countries of Europe through their
governments and parliaments. In November 1990 the Council adopted the “Convention on
72
Laundering, Search, Seizure and Confiscation of the Proceeds from Crime” (known as the
“Strasbourg Convention”), which outlines steps to be taken to combat money laundering.
More recently the Council of Europe established a Select Committee of Experts on the
Evaluation of Anti-Money Laundering Measures. The Select Committee elaborates
appropriate questionnaires for self-and mutual evaluations, evaluates, by means of self- and
mutual evaluations questionnaires and periodic on-site visits -- based on the FATF model,
the performance of those member States of the Council of Europe which are not members of
the FATF in complying with the relevant international anti-money laundering standards,
adopts reports on each evaluated country’s money laundering situation, and where
appropriate, makes recommendations with a view to improving the efficiency of their anti-
money laundering measures and the furthering international co-operation and submits an
annual summary of its activities and recommendations to the European Committee and
Crime Problems (CDPC).
The primarily Eastern European members of the Select Committee are faced with serious
challenges corruption, capital flight, and organized crime as they make their transition from
a Socialist to a market based economy. Perhaps because these challenges are so serious but
certainly, in any event, because of the dynamic leadership of several individuals involved --
the Select Committee is to be commended for making remarkably rapid progress in training
a cadre of experts, conducting credible evaluations, and motivating its members to take
critical action against money laundering.
The Caribbean Financial Action Task Force (CFATF). The CFATF is a regional anti-
money laundering body affiliated with the FATF. Using the FATF 40 recommendations as its
basic document, in June 1990 the group then endorsed 19 supplemental recommendations
designed specifically for the Caribbean Region. The CFATF is engaged in a variety of
activities, which include self-assessments and mutual evaluations of its membership to
identify problems and secure progress in the fight against money laundering. The CFATF
Also coordinates technical and training assessments and assistance for its membership,
and has completed two typologies exercises, to assess current trends in money laundering in
the Caribbean and to develop effective countermeasures. The CFATF will play a leading role
in implementing the joint US-EU anti-money laundering training and technical assistance
initiative for the Caribbean. This comprehensive program, covering financial, legal, law
enforcement, and regulatory measures, is the culmination of a number of efforts to develop a
regional training and technical assistance program by the US, EU, CFATF, and UNODCCP.
The Organization of American States (OAS). The OAS consists of 35 member states from
North, Central and South America. Anti-money laundering efforts of OAS are centered in its
Inter-American Drug Control
Commission (CICAD—Comisión Interamericana para el Control del Abuso de Drogas).

In 1992 the OAS issued Model Regulations with a recommendation that they be adopted by
member governments consistent with the basic provisions of their respective legal systems.
73
In recognition of the growing importance of money laundering issues and the need to
develop a framework to assist member governments in implementing the provisions of the
Buenos Aires communiqué, the OAS/CICAD reconvened the CICAD Experts Group to
Control Money Laundering in June 1996. Substantive discussion of regional money
laundering issues now regularly occurs within this Experts Group under the OAS
framework. In Santiago in October 1997, the Experts Group made a number of significant
recommendations, which were officially adopted by the OAS/CICAD in its November 1997
meeting in Lima, Peru. Among the recommendations of the Experts Group were to amend,
for the first time, the OAS Model Regulations on money laundering by adding language
which encourages governments to establish Financial Intelligence Units (FIUs) in
accordance with the Egmont Group definition. To formulate a comprehensive training and
technical assistance plan to assist governments in their efforts to implement the provisions of
the 1995 Buenos Aires Communiqué Plan of Action. This training plan will include
provisions for training and technical assistance in the financial sector, for FIUs, and for law
enforcement personnel, judges, magistrates and prosecutors.
The Experts Group agreed to conduct a yearly typologies exercise to determine the
money laundering methods being utilized in the hemisphere by sharing experiences in
dealing with this problem. Annual typologies reports will be produced. In addition, an initial
analysis of member responses to the CICAD Self- Assessment Questionnaire (used to
determine progress in implementing the Buenos Aires Communiqué Plan of Action) was
produced and an English text will be widely circulated in the near future.
Summit of the Americas. In 1995, the Ministerial meeting of the Summit of the Americas
produced the Buenos Aires Communiqué Plan of Action -- a statement of principles which
encouraged all participating nations to comply with international money laundering
practices. As a practical matter, implementation of the Communiqué is being carried out by
the OAS/CICAD. The Asia Pacific Group on Money Laundering (APG). In 1994, the FATF
established an “Asia Secretariat" to work toward development of a regional anti-money
laundering body in the Asia/Pacific region. The Asia Pacific Group on Money Laundering
(APG) was formally established in February 1997 at the Fourth Asia/Pacific Money
Laundering Symposium in Bangkok, Thailand. Initial membership of the group consists of
representatives from Australia, Bangladesh, China, Japan, New Zealand, Philippines,
Singapore, Sri Lanka, Thailand, the United States, and Vanuatu. This group is the newest
“FATF-style” regional body, and a clear sign of recognition by governments in Asia and the
Pacific that money laundering is a significant international and regional issue.
The APG plans to provide a focus for regional anti-money laundering efforts and will
work in close cooperation with the FATF and other regional FATF-style bodies. The first
goal of this group is to develop a statement of principles and measures for application within
the region. The Bangkok meeting also resulted in a set of proposed recommendations and a
consensus that money laundering is a serious threat that must be addressed globally.
Participants recognized that money laundering undermines the integrity of the region's
74
financial institutions and that anti-money laundering controls have a positive effect on
economic growth by attracting legitimate investments and capital. There was agreement that
bank secrecy laws should not interfere with the ability to ensure the integrity of financial
institutions and that central banks and finance ministries play a very important role. It was
also recognized that the offense of money laundering should cover all serious crimes.
Representatives of 25 jurisdictions and seven international organizations or bodies,

comprising member jurisdictions and observers to the APG, attended the First Annual
Meeting of the APG in Tokyo, Japan on 10 - 12 March 1998. The meeting was co-chaired by
the Republic of the Philippines and Australia and hosted by Japan. Delegates at the meeting
from the member jurisdictions and observers consisted of experts in legal, financial,
regulatory and law enforcement matters. The meeting noted a recent assessment by the
International Monetary Fund that it regards the adoption of anti-money laundering standards
as "crucial to the smooth functioning of financial markets," as well as the timely and topical
remarks of the Managing Director of the IMF in a recent address to the FATF, which
recognized the importance of a global strategy for the good governance of financial markets.
The Tokyo meeting also noted that, because of the particular economic difficulties facing
a number of jurisdictions in Asia, there is an even greater need for the introduction of sound
and transparent financial and regulatory systems that can address money laundering issues.
Noting the diversity of legal and economic systems within the region, the APG recognized
that a measure of flexibility is required in the way each jurisdiction deals with the issue.
Jurisdiction reports demonstrated that many of the jurisdictions at the meeting had made
significant progress toward implementation of the internationally accepted anti-money
laundering standards, but the APG will have to address certain regional factors, such as the
cash-intensive nature of many Asian economies. In this respect, the APG is presented with
both a challenge and an opportunity i.e., to tailor the application of the FATF
Recommendations (which were designed in the first instance to address the formal banking
sector in the advanced, western economies), or perhaps even to devise new measures more
appropriate to the circumstances that prevail in the region. In either case, because alternative
financial markets are by no means limited to Asia, much of the rest of the world is hoping
that the Asian governments can demonstrate creative leadership through the APG to
implement effective measures in this area.
The Offshore Group of Banking Supervisors (OGBS). Another example of

transgovernmental cooperation can be seen in the efforts to prevent abuse of the international
and offshore banking sectors. For the last two decades, the growing use of competing
offshore jurisdictions has provided criminals with even more places to hide their money
from international authorities. Offshore jurisdictions charge only nominal fees for special
incorporation of banks and other business (“international business corporations” or IBCs),
and in return offer increased privacy and special protection from international scrutiny of
records. Since information sharing is the key for international bodies to fight money
laundering, this situation often provide havens for criminals to hide their dirty money. To
75
counter this threat, many offshore jurisdictions have also joined the international fight
against money laundering, as they also act to prevent their individual systems from abuse.
The Offshore Group of Banking Supervisors (OGBS) has endorsed the Basle Committee on
Banking Supervision’s call for information sharing among offshore banking regulatory
authorities for banking violations including money laundering. The OGBS has also agreed to
embark upon a mutual evaluation process. The so-called “FOPAC Group” of INTERPOL
also plays an important international role in the fight against money laundering. The FOPAC
Group focuses on the identification, tracing, seizure and forfeiture of assets derived from
criminal activities. It also conducts awareness training and money laundering threat
assessments throughout Europe. The FOPAC Group was involved in drafting the Council of
Europe Convention, and it has been instrumental in developing model legislation designed to
make it easier to obtain this sort of evidence that is needed in criminal investigations and
proceedings aimed at confiscation of the proceeds of crime. This model legislation has been
distributed to member states so that any government interested can adapt and adopt it. In
pursuit of the aims of this program, a Financial Assets Encyclopedia has also been prepared
and distributed to member states, to show the current state of legislation and law
enforcement in different countries. World Customs Organization (WCO). Another regular
participant in the international anti-money laundering movement is the World Customs
Organization (WCO). Because customs officials must be involved in effective international
anti-money laundering efforts, the willingness of the WCO to participate in the work of the
various international foray, and to provide expert training and technical assistance for its
membership, has contributed significantly to the international effort. Development of
Financial Intelligence Units (FIUs) -- the Egmont Group. An important recent development
in the international approach to combating money laundering is the creation of Financial
Intelligence Units (FIUs) around the world. An FIU is a centralized unit for financial
intelligence, formed by a nation to protect its financial services sector, to detect criminal
abuse of its financial system, and to ensure adherence to its laws against financial crime and
money laundering. An FIU, quite simply, is a central office that receives disclosures of
financial information, analyzes or processes them in some way and then provides them to
appropriate government authorities in support of a national anti-money laundering effort.
Some FIUs may also investigate and prosecute money laundering cases; some are actively
involved in the development of their governments’ anti-money laundering policies and the
administration of their anti-money laundering regulatory controls. FIUs typically have
independent and unique relationships with banks, central banks, and law enforcement. These
relationships allow FIUs to foster the partnerships that are essential to combating money
laundering and financial crime. The creation of FIUs has been shaped by two major
influences: law enforcement and detection.
Most countries have implemented anti-money laundering measures alongside already
existing law enforcement systems. Certain countries, due to their size and perhaps the
inherent difficulty in investigating money laundering, decided to provide a clearinghouse for
financial information. Agencies created under this impetus were designed, first and foremost,
76
to support the efforts of multiple law enforcement or judicial authorities with concurrent or
sometimes competing jurisdictional authority to investigate money laundering.
Through the FATF 40 Recommendations and regional organizations initiatives, such as

the European Union, the Council of Europe, CFATF, and OAS/CICAD, the concept of
suspicious transaction disclosures has become a standard part of money laundering detection
efforts. In creating transaction disclosure systems, some countries have seen the logic in
centralizing this effort in a single office for receiving, assessing and processing these reports.
FIUs established in this way often play the role of a "buffer" between the private financial
sector and law enforcement and judicial/prosecutorial authorities. This has, in some cases,
fostered a greater amount of trust in the anti-money laundering system, with the FIU serving
as the honest broker between the private and government sectors. Despite the fact that
several FIUs were created throughout the world in the early 1990s, their creation was at first
seen as individualized phenomena related to the specific needs of the jurisdictions
establishing them. Since 1995, a number of FIUs have begun working together in an
informal organization known as the Egmont Group (named for the location of the first
meeting at the Egmont-Arenberg Palace in Brussels). And the numbers have grown
dramatically. In 1995, 14 units met in Brussels; three years later, FIUs were recognized in
Buenos Aires. As with other anti-money laundering organizations, the Egmont Group is not a
political body, but rather practical, and focuses on expert to expert exchanges of information.
The goal of the Group is to provide a forum for FIUs to find ways of improving support to
their respective national anti-money laundering programs. This support includes expanding
and systematizing the exchange of financial intelligence information, improving expertise
and capabilities of personnel employed by such organizations, and fostering better
communication among FIUs through application of technology. Within the Egmont Group,
working groups are focused on four major areas: legal matters, technology, training, and
outreach. One of the most noteworthy, practical accomplishments of the Egmont Group has
been the development of a secure Internet web site or "virtual private network." This web
site permits Egmont FIUs to access information on other FIUs (missions, organizations, and
capabilities), money laundering trends, financial analysis tools, and technological
developments. It also permits the participating FIUs to communicate by means of a secure
electronic mail system. Since the web site is not accessible to the public, FIUs may share
certain types of sensitive information in this protected environment, a capability that is not
available anywhere else for FIUs. The "Egmont Secure Web" became operational in
February 1997. Nineteen units are currently on-line, and more connections will be made as
FIUs acquire appropriate software and computer configurations.
The UNCAC requires the establishment of a Financial Intelligence Unit (FIU) for
receiving, analyzing and disseminating reports of suspicious transactions to competent
authorities and preventing and combating the transfer and recovery of proceeds of offences
established within the Convention. In accordance with section 4(f) of MLPA, a Financial
Intelligent Unit (FIU)
77
has been established, by an administrative order, within the Anti-Money Laundering

Department (AMLD) of the Bangladesh Bank in March 2007. The FIU aims to combat
financial crimes and retrieve assets and money kept overseas by graft suspects. It focuses on
receiving, analyzing and disseminating information to detect suspicious transactions as well
as to trace, seize and confiscate the respective assets. It requires banks to have a reporting
chain for suspicious transactions to AML Compliance Officers who will in turn report such
transactions to the FIU.
Under the existing law BB may share information with domestic law enforcing agencies,
but not with the other State Parties or FIUs of foreign countries. The FIU’s effectiveness will
be largely enhanced on acquiring membership of Bangladesh in the Egmont Group, a
coordinating body for the international group of financial intelligence units that promote and
enhance international cooperation in anti-money laundering and counter terrorist financing.
The Group with its Secretariat in Toronto, Canada has a membership of 106 FIUs. To
become member of the body, Bangladesh needs sponsorship from three countries while
Thailand, Malaysia and Mauritius has already assured Bangladesh to be the sponsors.
Bangladesh would need to fulfill certain conditions to qualify as member. Preparations are
being made to apply in 2008; for membership in the Egmont Group. Once that happens BB
would face no legal bar to exchanging information or expertise with FIUs of the other
countries also the FIU will play a key role in facilitating information where there are MLAs
between Bangladesh and any other State Party.
Currently there is limited capacity to trace, seize, confiscate and subsequently return
assets that have been transferred abroad. The analytical capacities of the FIU would benefit
from further upgrading; in particular with the upgrading of the current data base and
intelligence analysis system allowing for collection and analysis of suspicious and cash
transaction reports as well as the dissemination of such information to relevant law
enforcement agencies. A lack of training, resources, computer technology, including
computer links with the outlying districts continue to hinder progress.
In 1996, the Egmont Group defined an FIU as: "a central, national agency responsible for
receiving (and, as permitted, requesting), analyzing, and disseminating to the competent
authorities, disclosures of financial information: (i) concerning suspected proceeds of crime,
or (ii) required by national legislation or regulation, in order to counter money laundering."
Since its adoption, the definition appears to have become a standard against which newly
forming units are being measured. At the June 1998 meeting of the Egmont Group in Buenos
Aires, Argentina, the group welcomed 10 new members as fitting the Egmont definition,
bringing the total to 38. Many more FIUs are in planning and development stages around the
world. These new “financial intelligence units” will help increase the scope and global
nature of the fight against money laundering.
The activities of global and regional organizations have so organized networks that we
can not left out to corruption and money laundering as this is an international issue.
78
Bangladesh Penal Code, Foreign Exchange Regulations Act, 1947 (FERA), Income Tax
Ordinance, 1984, Money Laundering Prevention Act, 2002 (MLPA) and Anti-Corruption
Commission (ACC) Act, 2004 are laws to prevent such crimes. While there is always room
for improvement in the legal framework, the blame cannot be put squarely on that. It's the
implementation of the laws that leaves a lot to be said.
Shortcoming of the policy
Our economy based on cash transaction and it is very difficult for reporting authority to
report to Bangladesh Bank unless law enforcement agencies find and confiscate the money.
You can remember the case of famous boner raja (chief of Forest department held during
emergency rule) who was hiding money inside pillows.
Bangladesh Business concerns are having transaction in cash by tradition since long.
Customers are not willing to use Bank to avoid tax departments due to fear of the department
and habitually don’t pay tax. The NBR trying to introduce electronic cash register for
calculating VAT on sales but having strong resistance from shop owners as the want to avoid
VAT supervisors. They are in favor of fixed tax per month but donot like to maintain actual
records. There is an urgent need to change the culture through confidence building among
the trader. This cash transaction culture is a limitation to observation of transactions by
banks and FIs. The other way around to deposit money by the business of large regular
transactions. The place cash to the Banks and issue cheques and banks may not take note of
any abnormal transaction.
Another method is to start a business, whose cash inflow cannot be monitored, and
increase or decrease the transaction and pay taxes on it. To avoid suspicion, shell companies
should deal directly with the public, perform some service (not provide physical goods), and
have a business that reasonably would accept cash as a matter of course. Dealing directly
with the public in cash gives a plausible reason for not having a record of customers. This is
a general practice of new intruders into business from other profession to cover up illegal
money and making those white.
Others
The Securities and Exchange Commission in possession of financial information through

annual business reports etc are left out from these responsibilities as black money launders
safely in stock market.
Furthermore the money laundering prevention regimes require strengthening to comply

with international standards. Legislation should provide for safe harbor provisions in order to
protect reporting individuals, and banker negligence accountability that would make
individual bankers responsible if their institutions launder money.
79
In accordance with the provisions of the MLPA the BB has advised banks to maintain an
antimony laundering compliance policy through issuance of a detailed Guidance Notes on
Prevention of Money Laundering. Banks and FIs are required to have an anti-money
laundering compliance unit in their head office and a designated AML compliance officer in
each bank branch. Anti Money Laundering Circular no 2 (17 July 2002) of the BB requires
every bank and FIs to maintain the correct and complete records of identity and updated
details of transaction. FIs have been advised to establish the identity of their customers and
business relationships through KYC (Know Your Customer) procedures. If the account
holder is a public figure, the account will automatically become a High Risk Account and
KYC profiles of such accounts are to be updated at least annually and checked for
compliance.
BB should conduct training for Bankers around the country on KYC practices. Finance
Ministry has issued an instruction to open Bank account after proper identity as per National
ID issue by election commission.
The banking records are maintained manually with little technological support, although
this is slowly changing, especially in head offices. Accounting procedures used by the BB
may not have attained international standards in every respect. The new generation private
Banks are ahead of computerization of their branches ahead of public Banks.
Conclusions
The UN and some countries like US have taken the issue with government and other
organizations due to security reasons since the drug and terrorism has made the world a very
unsafe to live peacefully. By this time everyone understands the global nature of the money
laundering problem. But on the other hand the world’s financial markets are becoming
increasingly intertwined, and free trade agreements and customs unions are increasing the
movement of goods and people while blurring traditional borders. These new global
systems, fueled by technology, also allow criminals and their money to move easily from
one jurisdiction to another, as they seek less regulated areas of the world to hide. The
international community is responding, inter governmental groups made up of financial,
regulatory and judiciary specialists are working in a variety of ways to share information and
expertise to fight money laundering and other crimes. And although they act internationally,
they do so in their own national interest to improve enforcement of domestic laws and
regulations, and to protect their financial systems from criminal abuse. United Nations and
the FATF, regional bodies such as the APG, the CFATF, and the Council of Europe have
created mechanisms to ensure compliance with accepted antimony laundering practices. The
Egmont Group continues to increase its membership, providing a network of units
specializing in fighting money laundering, through information sharing, technology, and
training. Many nations and some regions such as Middle East and Africa have yet to join the
anti-money laundering effort many countries which have enacted laws and regulations have
taken no significant enforcement action. The regulators in Bangladesh also in learning
process and The alternative remittance systems, the development of new payment
80
technologies, and the continuing evolution of the financial services industry. But because
finance is global, no part of the world can ignore the threat posed by money laundering.
Rather, all nations must join the international community, working together to insure the
stability and integrity of financial system.
Some of the countries like Bangladesh not yet take the matter as own problem although
passed acts and formulating rule and training the personnel to fight money laundering at the
advice of UN and other friendly countries. The money laundering is not a real security threat
for us although the major part of economy is dominated by black money and due to weak
administration it is not yet a visible problem. Moreover, Money laundering is an
international problem and UN taken it up with a mission. The global community has many
regional and international grouping and organized action and co-operation. They are closely
monitoring the action of Bangladesh as all countries are obliged to act as per promise and
decisions. Their close vigilance will promote the reform of our legal and monetary system
for greater benefit of the nation as we are not willing to reform the laws and rules or change
the mentality. US promote these as part of their own national security strategy. We are
enjoying benefit of quick regulatory reform.
The strict enforcement of money laundering act will make 75 m people as suspect of
money laundering. More over their act of money laundering are out of innocent activities
without any malice. The expatriate earn value foreign exchange as honest income but make
the money black by sending the money through hundi means laundering the money. There
are some more honest income through international trade of some traders but due to strict
Foreign exchange regulation act 1947 the income cannot repatriate into Bank as these are
subject to many formalities before earning and approval of Bangladesh Bank. Can
Bangladesh effort to proceed with investigation against half of the citizens?
81

Money Laundering &amp; 75 Million Suspects

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